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The Office of the Telecommunications Authority (OFTA) today (May 23) said that it is prepared to help fixed and mobile network operators to engage in commercial negotiations relating to the withdrawal of the regulatory guidance on "Mobile Party's Network Pays" (MPNP).
The withdrawal of the current MPNP arrangement is one of the major decisions set out in the "Deregulation for Fixed-Mobile Convergence" Statement issued by the Telecommunications Authority (TA) on April 27, 2007. Under the MPNP arrangement, the fixed-mobile interconnection charge (FMIC) is paid by a mobile network operator (MNO) to the interconnecting fixed network operator (FNO) for telephony traffic both from a fixed customer to a mobile customer, and from a mobile customer to a fixed customer.
"Although the MPNP arrangement is currently set to expire with effect from April 27, 2009, we have noted that there have been no substantial negotiations between the MNOs and FNOs about the transition from the MPNP environment into a fully deregulated one. With the two- year transitional period entering into its second and final year, the TA considers that the FNOs and MNOs alike should treat the matter of a new arrangement with urgency and they should make genuine efforts at negotiations to achieve a smooth transition to the deregulated era," an OFTA spokesman said.
"Today, PCCW-HKT Telephone Limited (PCCW) has published in the gazette an increase in the rate of its traditional FMIC tariff from 4.36 cents per minute to 5.45 cents per minute. The new rate will be effective from June 1, 2008. In its application filed with the TA, PCCW advised the TA that the rate increase would be temporary and would end on April 27, 2009, when the regulatory guidance in favour of MPNP would be withdrawn," the spokesman continued.
"Under the fixed carrier licence of PCCW, where the TA does not arrive at a definitive view that the tariff increase would, or would not, contravene the competition provisions in the Telecommunications Ordinance (TO), PCCW's application for tariff amendment is deemed to be approved after a period of 30 days has elapsed.
"The view of the TA at this stage was that there was no conclusive basis for saying that the tariff increase would contravene any of the competition provisions in the TO. As PCCW filed its application on April 17, 2008, and the 30-day period has lapsed on May 16, 2008, the new FMIC tariff of PCCW is deemed to be approved," the spokesman explained.
The statement entitled "Increase in charges of mobile network interconnection by PCCW-HKT Telephone Limited" published today on OFTA's website gives a detailed account of the position of the TA in relation to the FMIC tariff increase by PCCW. The statement can be downloaded from OFTA's website (www.ofta.gov.hk/en/tas/ftn/tas20080523.pdf).
At present, a regulatory guidance from the TA is in place in favour of a structure for payment of the FMIC based on the MPNP methodology. The FMIC tariff of PCCW is the interconnection charge payable by MNOs to PCCW under the MPNP guidance.
The withdrawal of the current MPNP arrangement is one of the major decisions set out in the TA Statement on "Deregulation for Fixed-Mobile Convergence" published on April 27, 2007. In making the decision to withdraw the MPNP arrangement, the TA considers that the absence of regulatory intervention on FMIC is unlikely to result in a market failure. In other words, the TA considers that the market is likely to settle the FMIC by itself.
Ends/Friday, May 23, 2008
Issued at HKT 14:30
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