Economy

Vodafone successful in appeal against ComReg proposals

Published

13 years ago

August 17, 2013

Vodafone has successfully challenged a proposal by the communications regulator to cap the inter-operator charges mobile companies levy on each other to carry calls between networks.

The Commercial division of the High Court found ComReg's proposal for the industry last November was "flawed" and not based on an appropriate analysis of the costs incurred by operators in the Irish market.

Prior to the appeal by Vodafone ComReg had proposed a cap of 2.6 cents per minute on the charges that networks impose on other operators when they handle a call from a customer using another network to one of their own customers.The maximum charge of 2.6 cent was to come into force in January. From the beginning of July it would fall to 1.04 cents.Vodafone challenged the proposal.The High Court found ComReg's analysis of Mobile Termination Rates (MTRs) from seven countries within the EU in order to arrive at a figure for Ireland was not appropriate.Mr Justice Cooke said that taking an average of MTRs from such a small number of member states was an "inherently unreliable" method of calculating a rate for Ireland.He referred to the small sample size and the fact that four of the seven countries, including the UK and France, were among the largest in the EU.

Vodafone had argued that the countries might not be directly comparable to Ireland because of the size of their markets and the economies of scale for operators.

The court set aside ComReg's proposal.

The ruling could have significant consequences for the costs incurred by mobile companies and their entitlement to charge other operators for calls terminated on their networks.

Vodafone alone terminated 1.6 billion minutes of calls on its network in 2012.

In a statement following the judgement Vodafone said the MTR proposal, while it might not directly impact mobile phone bills for consumers "would have inhibited future investment in advanced broadband networks relied upon by consumers and businesses".

"The level at which MTRs are set should reflect the cost of operating and investing in the network in the Irish market," it said.

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