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The Office of the Telecommunications Authority (OFTA) announced today (April 26) that the regulatory guidance on fixed-mobile interconnection charge (FMIC) in favour of the mobile party's network pay (MPNP) model will be withdrawn as planned on 27 April 2009 when the two-year transition period ends. Interconnection charge for fixed-mobile interconnection will thereafter be settled among fixed and mobile operators by commercial agreements without any ex ante regulatory intervention.
"The Telecommunications Authority (TA) is pleased to see that in order that they may operate in the market with business and regulatory certainty, a number of major players have reached commercial agreements or understanding for the post transition period. This commercial outcome without regulatory intervention is commendable, and it demonstrates that a market solution for FMIC is indeed feasible and achievable," a spokesperson for OFTA said.
"According to information filed with OFTA so far, we notice that in all the agreements or understanding that have been reached among operators, the parties agree to exchange traffic with each other without the levy or payment of interconnection charge. This indicates that the so-called Bill and Keep (BAK) arrangement is preferred," the spokesperson continued.
"The TA would like to take this opportunity to encourage operators who have not yet reached agreements to speed up and conclude their negotiations as soon as possible. The TA would also like to remind operators that they should observe their licence obligations to interconnect and provide a good, efficient and continuous service. If there is any risk of disconnection or adverse impact on the service, he will not hesitate to uphold the public interest and use his power to secure interconnection and ensure the delivery of normal service," added the spokesperson.
Background
Prior to 27 April 2009, FMIC has been subject to a regulatory guidance in favour of the MPNP approach. That is to say, interconnection charge was paid by a mobile network operator (MNO) to the interconnecting fixed network operator (FNO) for telephony traffic both from a fixed line to a mobile phone, and from a mobile phone to a fixed line.
After carrying out an extensive regulatory review and public consultation exercise involving all industry stakeholders, the TA announced on 27 April 2007 the decision to withdraw that regulatory guidance, subject to a transitional period of two years which was intended to enable MNOs and FNOs to negotiate new FMIC arrangements. The de-regulation of FMIC was consistent with the market-driven policy adopted by the Government and removed regulatory asymmetry which was not conducive to the development of fixed-mobile convergence. The TA has also made it clear on various occasions that he will not issue replacement guidance for FMIC unless there is any change of circumstance that justifies regulatory intervention.
On 16 January 2009, the OFTA issued a consultation paper to seek views from the industry on the proposed modifications to the "Interconnection and Related Competition Issue Statement No. 7 (Second Revision) – "Carrier-to-Carrier Charging Principles"" ("Statement No. 7 (Second Revision)") which contained the MPNP guidance. On 3 April 2009, after considering comments received in response to the said consultation paper, the TA published the Statement No. 7 (Third Revision) which will take effect on 27 April 2009 and remove the part regarding the regulatory guidance in favour of MPNP.
Ends/Sunday, April 26, 2009
Issued at HKT 10:00
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