Vodafone challenges ComReg decision on call termination costs

Tue, Jan 15, 2013, 00:00

Vodafone has brought a legal challenge to price-control decisions by the communications regulator affecting charges levied by mobile phone companies for terminating incoming mobile voice calls to their networks from customers using other mobile and fixed networks.

Decisions by communications regulator ComReg, which came into force on January 1st, set 2.60 cents a minute as the maximum charge each significant market power mobile service provider can levy for such call termination services. That, and a “more onerous” decision due to come into effect from July 1st, will have a major impact on Vodafone’s revenues, it is claimed.

Vodafone says its revenue for the relevant call termination services has fallen from €95.7 million for the past six months of 2007 to €31.8 million for the six months for the period to September 2012. A quarter cent variation in the call termination price can affect revenues by up to €4 million, it said.

The case relates to a price control decision of November 2012 for mobile call voice termination, the name given to the service where mobile companies terminate inbound voice calls on their networks. Such calls can originate from other mobile and fixed networks in Ireland and abroad.

The proceedings were transferred yesterday to the Commercial Court, on the application of Niamh Hyland SC, for Vodafone, with consent of Paul Sreenan SC for ComReg, by Mr Justice Peter Kelly.

The judge was told Eircom supported ComReg’s price control decision and is considering whether to apply to join the action as a notice party.

While the price controls decision affects six other mobile operators, only Vodafone has brought a challenge.

The action relates to decisions of November 21st by ComReg under the relevant EC Regulations, applying to mobile service providers with significant market power.

Vodafone claims the price-control decision instrument specifies that mobile phone call termination rates be set in accordance with pure long run incremental cost (LRIC) methodology but no such pure LRIC model has yet been elaborated by ComReg for Ireland.