OREANDA-NEWS. March 03, 2011. The National Regulatory Agency for Electronic Communications and Information Technology is announcing its intent, within 2 - 3 months, to complete the legal procedure of designating Moldtelecom as a provider with significant market power on the market for end-user access to the public telephone network at a fixed location, after which they will review and approve, in consultation with the Government, the tariffs for fixed telephone services provided by this supplier to end users – natural persons.

According to legislation, the Agency may approve the tariffs for fixed telephone services provided by Moldtelecom to end users - natural persons, only if it is designated by ANRCETI as having significant market power on a relevant market or if its dominant position in the relevant market is established by the National Agency for Competition Protection (ANPC). In July 2007, ANPC established the dominant position of JSC Moldtelecom on the market for local fixed long-distance and international telephone services, on the territory of Moldova.

But, in January 2011, the ANPC took another decision by which it canceled the previous one. In this situation ANRCETI had no legal grounds to intervene in the process of setting and implementing the new tariffs for telephone services by JSC Moldtelecom. However, the Agency keeps to its opinion that it is necessary to gradually implement cost-oriented tariffs for fixed telephony services provided by JSC Moldtelecom and eliminate the practice of cross-subsidization of local telephone services from other services provided by this company, a practice prohibited by legislation.

Thus, in recent years the revenue of JSC Moldtelecom from local telephone services cover only 55% of the costs incurred by this operator in providing these services, and the deficit of 45% is subsidized from the revenues from international calls and interconnection with other operators. In 2002, in order to prepare for full liberalization of the telecommunications market, the Agency approved, in consultation with the Government, the tariff rebalancing plan for the basic public services provided by JSC Moldtelecom.

Only two stages out of the four intended according to the plan were implemented: first - on 1 February 2003, and the second - 1 February 2004. In 2005 and 2006, then in 2009 and 2010, new draft tariff rebalancing proposals for fixed telephony services provided by Moldtelecom, were submitted to the Government for consultation, but the Agency was advised to delay their consultation for other time.

Under these circumstances, JSC Moldtelecom continues the practice of cross subsidization of services, maintaining low tariffs for retail services and high tariffs for wholesale, factors that cause stagnation of fixed telephony market, blocks the competition and leads to poor development of broadband market.