OREANDA-NEWS. November 26, 2010. St Petersburg hosted the 40th session of the CIS Economic Council. Anatoly Golomolzin, Deputy Head of FAS Russia, took part in the session, reported the press-centre of FAS Russia.

The agenda included discussing the Report “On the State of Competition in the Telecommunications Market in the CIS Member-States”.

The Report was based on the joint investigation of the telecommunications market carried out in 2008 - 2009 by the Headquarters for Joint Investigations of the Antimonopoly Violations in the CIS Member-States (the Headquarters), formed by the Interstate Council for Antimonopoly Policy (ICAP).

The work of the Headquarters is led by Anatoly Golomolzin, Deputy Head of FAS Russia, who presented the Report at the session of the Economic Council.

The investigation was necessary because of great importance of developing telecommunication markets for economic integration of the CIS member-states. Practically all countries in the world tend to liberalize their communications markets and encourage competition, and all countries go along their own way from monopoly to developed competition in the field of telecommunications. Under mature competition, telecommunication markets achieve the maximum pace of innovative growth, simultaneously increasing availability of their services to the consumers.

The Report reviews government regulation of the telecommunication market in the CIS member-states. In particular, is covers the issues of licensing, equipment certification, allocation and distribution of radio frequency spectrum and numbering resource, connection and interaction of telecommunications networks, government tariff regulation, universal services, as well as government control and supervision in the communications sector and special requirements and restrictions to the providers.

The Reports gives recommendations towards development of competition in the telecommunication market of the CIS member-states.

Special attention is paid to the connection services in the mobile telecommunication networks with use of international roaming.

The main factor in international roaming pricing for cellular networks as well as fixed communications networks is the cost of call termination. According to providers’ estimates, its share of costs in the subscriber’s rate is no lower than 50% including the agent’s costs (the remaining costs in subscriber’s rates relate to connection, including capital costs of the provider, operating expenses and profit).

Providers also pointed out that if the call is terminated in a country where the market of international and inter-city communications is demonopolised, the call termination costs go down in comparison with those countries that have only international and inter-city networks of a single provider.

The investigation also revealed the signs of antimonopoly violations in companies’ setting the rates for telecommunication services with use of roaming. The antimonopoly authorities of the Russian Federation and the Republic of Kazakhstan carried out investigations within their jurisdiction and initiated cases against their dominant providers.

At the end of October 2010, the antimonopoly authorities of both countries completed the investigations and found that the companies had violated the antimonopoly law by fixing and maintaining monopolistically high prices for roaming communication services and imposing contract conditions that were disadvantageous for counteragents, including package services of mobile radiotelephone communications at the average rate, regardless of the subscriber’s preferences.

In course of the case investigations, Russian cell providers announced cutting down their rates for international roaming communication by 1.5 – 4 times. Kazakh providers also announced multiple rate reduction.

This outcome demonstrates that coordinated measures of antimonopoly response are highly effective. Such approach facilitates development of competition on relevant markets, generates obvious benefits for the customers and creates a good basis for expanding social-and-economic cooperation within the CIS.

The reports caused an earnest dialogue between members of the CIS Economic Council, who approved the conclusions and recommendations for developing competition in the telecommunication market of the CIS member-states and recommended that the interested ministries and government agencies should take them into account to liberalize the market of telecommunication services in the CIS.

The Interstate Council for Antimonopoly Policy and the Regional Communications Commonwealth were instructed to assist the national antimonopoly bodies and the authorized bodies of the CIS member-states in the filed of communications to develop competition in the telecommunication markets.

Following the proposal of the Chairman of the CIS Economic Council, Igor Shuvalov, approved by the Council members, information on the issue in question was submitted for consideration of the Council of the Heads of the CIS Governments.

On 19th November 2010, the Council of the Heads of the CIS Governments discussed the issue at the meeting in St Petersburg. The Heads of Government acknowledged significant work carried out by the antimonopoly authorities of the CIS member-states within the ICAP framework, aimed at decreasing the rates for roaming communication services.

The Council of the Heads of the CIS Governments also recommended that in Q1 2011 the antimonopoly bodies of the CIS states should finalize the procedures for investigating the antimonopoly violations in the market of communication services with use of international roaming. The authorized telecommunication regulators in the CIS member-states should no later than Q1 2011 address the issue on reducing the rates for regulated services of call termination to the networks of providers of international telecommunication that affect the costs of international roaming communications.

In their decision, the Heads of the CIS Governments recommended ICAP to continue joint efforts of antimonopoly bodies on socially important markets and markets positively affecting economic cooperation between the CIS member-states.