OREANDA-NEWS. February 19, 2013. Bakcell - the First Mobile Operator and Leading Mobile Internet Provider of Azerbaijan announces that it has won the interconnection tariff-related lawsuit raised “Azercell Telekom” LLC, reported the press-centre of Bakcell.

On 26.07.2011, Baku Administrative-Economic Court #1 in its resolution for case #2iqt(81)-1189/2011 has satisfied the claim of “Bakcell” LLC (the claimant) against “Azercell Telekom” LLC (the respondent) on validation of the Additional agreement to Interconnection contract (dated 01.08.2006) as of 03.04.2009 and payment of compensation of over AZN 15m for caused damage.

“We are very pleased with the court decision and the fact that the justice is served. Azercell has abused its dominant position and placed smaller operators at a disadvantage. The Court has remised this situation and punished Azercell for its abusive behavior. I would like to emphasize that as a result of this lawsuit the consumers i.e. the regular users of mobile communication services, are the real winners. Bakcell will continue providing its customers with high quality communication services at beneficial tariffs”, says Mr. Richard Shearer, Bakcell CEO. 

The Administrative-Economic board of Baku Court of Appeal (in its resolution 2-1(103)-290/2012 dated 27.07.2012) did not satisfy the appeal of “Azercell Telekom” LLC, and resolution of Baku Administrative-Economic Court #1 (dated 26.07.2011) for case 2iqt(81)-1189/2011 remained  in full force and effect.

Finally, the Administrative-economic board of the Supreme Court of the Republic of Azerbaijan (in its decision dated 06.02.2013) did not satisfy the cassation appeal filed by “Azercell Telekom” LLC against resolution 2-1(103)-290/2012 (dated 27.07.2012) of Administrative-Economic board of Baku Court of Appeal.

Hence, all the arguments mentioned in the complaints of “Azercell Telekom” LLC filed in the course of 2 years period against the relevant claim of “Bakcell” LLC were rejected, and all the demands of “Bakcell” LLC related to interconnection tariff were satisfied by all the instance courts of Azerbaijan.

Information on the lawsuit:
Mobile operators pay each other a fixed tariff per minute for off-net calls, which is called the “interconnection tariff”. In April 2009, the Ministry of Communications and Information Technologies of the Republic of Azerbaijan (MCIT) has set new interconnection tariff for GSM operators at the level of 0.02 AZN.  In this relation, “Bakcell” LLC proposed “Azercell Telekom” LLC to reduce the existing interconnection tariff to the required level, but the opposite party stated to be satisfied with current tariff (1 minute=0,05 AZN).

The fact that the current interconnection tariff is much higher than the one required by the MCIT has an adverse effect on the mobile communication market in general, and limits Bakcell’s ability to price its services more competitively for its customers.

Since the original decision by the MCIT in April 2009, “Bakcell” LLC has strived to introduce the 2 qepick interconnect rate, which would have led to a faster reduction in retail tariffs for end-user customers. However, “Azercell Telekom” LLC has refused to cooperate and comply with the Ministry’s requirement. Thus, Azercell maintained very high retail tariffs for customers until recently when the market pressure, driven by Bakcell, to reduce retail tariffs has become so great that Azercell has been forced to lower tariffs for customers.

For three consecutive years “Azercell Telekom” LLC refused to comply with relevant regulatory document of the MCIT and thus maintained very high tariffs for customers. As a result, “Bakcell” LLC was forced to take legal action in order to achieve the reduction of interconnection and retail tariffs in the interests of all mobile customers.