Summary

Facts

Although the mobile market has developed rapidly in Peru, there is increasing concern about the level of termination charges on mobile networks and its effect on the tariffs for on-net and off-net calls. On one hand, the termination charges are above international benchmarks. On the other hand, tariff differentiation of on-net and off-net calls can result in potential competition problems if charges do not relate to costs. The regulator noted that the persistent increase in the level of termination charges is explained by the monopoly power of operators in the call termination market.

Decision

Before setting cost-based mobile termination charges, the regulator called for a reduction in the cost of fixed-to-mobile calls and uniformity of mobile termination charges. Finally, the regulator set the following mobile termination charges (per minute billed by second):
- América Móvil Perú S.A.C.: US$ 0,1056.
- Nextel del Perú S.A.: US$ 0,0929.
- Telefónica Móviles S.A.: US$ 0,0922.

The salient characteristics of mobile termination regulation are:
- Symmetric regulation. Mobile charges were set for all mobile operators.
- Mobile charges are different for each operator, taking into account cost differences.
- Mobile termination charges include long-run incremental costs for the provision of service and a margin for common costs (general overhead and licensing payments)
- Gradual adjustment of charges should take place over three years. Thus in 2009, cost-based charges will be applied.