Archive for the ‘Termination’ category

FCC telecom overhaul vote delayed.

November 4, 2008

 Under pressure from Congress and consumer groups, Federal Communications Commission (FCC) Chairman Kevin Martin has canceled a vote tomorrow on a plan to overhaul intercarrier compensation and Universal Service Fund (USF) regulation.

Martin had proposed a “dramatic” update of inter-carrier compensation, along with a review of the way phone companies receive and can spend Universal Service Fund monies, but lawmakers and advocacy groups wanted to get a look at the details as to what would be proposed while giving affected parties the chance to comment. 

Reform details had been closely held, but reports said the rule changes would have resulted in the abolishment of the complex set of accounting “settlements” between larger carriers and rural phone companies, in exchange for a simplified rate policy that would have likely boosted rural phone line fees by a couple of dollars.

In addition, Universal Service Fund monies would have been used to compensate rural carriers for lost moneys, but USF funds would have to be specifically invested in broadband expansion.

If intercarrier compensation was reformed, large phone companies would stand to save the most money between lower fees and simplified accounting, while smaller rural carriers would lose out on a major source of revenue.

Last week, 100 members of Congress publicly petitioned the FCC to delay the vote while behind-the-scenes discussions took place between Capital Hill and the FCC commissioners.

FCC: FCC announces the removal of vote on wireline compensation.


Cellular impacting landline penetration.

October 20, 2008

 Fear over landline losses has prompted analysts to reduce estimates for third-quarter profit from telecom companies. The shares of Verizon and AT&T have been under pressure since last they reported earnings in late July. AT&T has slid 20% and shares of Verizon are down 21% over the last three months.

According to Thomson Reuters, analysts have reduced estimates for earnings per share and revenue for both Verizon and AT&T over the fear of landline losses. In its last quarterly report, AT&T said total connections fell 8.1% from the year ago period, worse than many anticipated.

Verizon’s landline revenue has also fallen 1.8% from a year ago. Total landlines fell 8.5% in the second quarter from a year ago, with a large amount of that decline coming from the residential segment.

With wireless penetration above 80% in the U.S., there is a limited pool of new subscribers for AT&T and Verizon to compete for.

But how VoIP fits into these figures? Simply we don’t know because VoIP subscribers are using cable services, naked DSL, WiFi/WiMax networks, direct links and not a landline service. So its difficult to count the penetration of VoIP service at this time.

VoIP Costs Bangladesh Government Money.

July 8, 2008

“Illegal” VoIP calls are costing the Bangladesh government millions of dollars per year, and the country’s Telecommunications Regulatory Commission (BRTC) is trying to find ways to reduce international call termination through “unlicensed sources”. 

 According to authorities, on average, an “illegal” VoIP call is costing the country about 3 cents per call, with 16 million calls a day being handled through VoIP.  If all the VoIP calls are illegal, it translates to roughly $480,000 a day and potentially $175 million a year in lost revenue. While government regulators are cracking down on illegal VoIP by looking to shut down satellite downlinks, they are also looking to drive official phone call charges down to a more competitive 4 cents profit per call.

In my opinion, the country of bangladesh need to adapt to the new telco economies and generate opportunities from services and not from termination. In modern vocabulary the term “illegal VoIP call” doesn’t exist!

The Daily Star: Illegal VoIP costs govt Tk1208.88cr a year.

Spain Antitrust Regulator Steps Up Telco Price Hike Probe.

July 7, 2008

An investigation into cell phone tariffs has resulted in the Spanish Competition Commission (CNC) reporting the three major operators for plotting to raise their fees at the same time. In my opinion if the regulators all over Europe make tariff investigation, the results will be the same. Termination fees to mobile networks in Europe are sky high without any excuse!

The CNC claims that Telefonica’s Movistar, Orange and Vodafone all raised their call connection charges in March 2007 for a mobile call from €0.12 to €0.15 cents. The probe was triggered by the Spanish consumer watchdog OCU which alerted the CNC to what appeared to be collusion among the three leading operators. Insiders believe the operators took this action to compensate for a drop in revenues following new legislation that forced them to stop rounding mobile tariffs to the nearest minute.

The operators have 15 days to respond to the CNC’s findings–with Orange already firmly denying that it had colluded with Movistar or Vodafone. Depending upon the outcome, the CNC has the powers to fine each operator up to 10 per cent of its annual revenue–although a penalty of this magnitude, if the findings are upheld, would appear very unlikely.

If true, then this accusation will be embarrassing for Telefonica which earlier this week complained about EU intervention over the plan to cut call termination rates. The company’s head of international operations, Lopez Blanco, was reported as saying that he didn’t think it was the right moment to open the debate in this sector.

AFP: Spanish authority rules mobile fee increase unlawful: report.

Here we go. Termination fees from European mobile operators to the right direction.

June 30, 2008

 EU’s telecoms commissioner, Viviane Reding, has announced a draft proposal that seeks to cut the termination fees charged by mobile operators by up to 70 per cent. Reding points to the present discrepancy between fixed and mobile termination fees–with fixed rates currently around €0.5 per minute, with their mobile equivalent much higher at around €0.9 or more, depending on the EU state in question! In terms of pricing, European operators they are leaving their own “dream”. From the other hand operators have reacted to this suggestion claiming that a 70 per cent cut would be crippling, adding that the cell phone industry had already seen annual declines for mobile termination fees of 10-15 per cent. Of course they try to keeping existing rates but Mrs. Reding have to push to the decline direction. 

Mobile operators generate around 20 per cent of revenue from termination fees with fixed customers indirectly subsidising mobile operators by paying higher termination rates for calls made from fixed lines to mobiles. This cross-subsidisation is estimated by market researchers at €10 billion in Germany for 1998-2006 and €19 billion in the U.K., Germany and France for 1998-2002. The EU has stated that the consultation with the industry will end on September 3, and the Commission plans to make a formal recommendation for a law in October.

ComputerWorkUK: EC consultation steps up pressure on telcos over termination fees.
CellularNews: European Commission Consults on Lower Termination Rates.
PacketData: Europe still living in another world! Mobile operators jack up roaming fees.


Europe still living in another world! Mobile operators jack up roaming fees.

May 31, 2008

Mobile Phone Penetration in Europe. 

Each Mobile Operator “Company”, in Europe, is a like an independent country, inside the country. They have their own regulations, the “usual” same “vendors” and most important their own ethics. They are doing anything they like. This is the main reason why mobile operators in Europe hold back, the telephony technology and voice integration with other applications.

Those billing-only-companies, increased the price of roaming calls coming into the European Union by as much as 163 percent, a move they says research firm Informa Telecoms & Media, is necessary to offset the losses from reduced charges within Europe itself.

The European Union stipulated the introduction of the Eurotariff last June and and its enforcement in September. The Eurotariff effectively caps European roaming charges at 49 eurocents per minutes for calls made abroad and 24 eurocents for calls received abroad, hitting Europe’s operators hard. As a result, Informa says operators have significantly jacked up roaming charges outside of Europe to make up for the difference. European regulators don’t have any legislative powers to regulate the cost of roaming outside their own territories, but they say they are well aware of the situation and are considering ways of remedying it. Roamers outside Europe paying price for reduced rates.

Ofcom ruling to hit 3 UK mobile operator, big time.

May 22, 2008

Despite arguing that a decision forcing 3 UK to cut its termination charges would severely damage its future revenues, the U.K. regulator Ofcom has stated that the operator must reduce the costs it imposes on rival companies to connect phone calls to its network by a hard-hitting 45 per cent.

The owners of 3UK, Hutchison Whampoa, said that it’s money-draining 3G unit finally achieved its cash flow target and that, “barring any further unfavourable regulatory or market developments, 3UK would turn a new page in 2008 on a path to achieve positive monthly EBIT on a sustainable basis in the second half of 2008 and full year positive EBIT in 2009.”

Regardless, the Competition Appeal Tribunal that heard 3UK’s viewpoint noted that mobile operators had traditionally set the rates at levels ‘much higher’ than the costs of connecting calls to their networks. It said the operators had used some of the income to subsidise deals they offered customers.

Financial times: 3 ordered to cut charge by 45%.