The Interconnection Market
Fees Reduced Again

The Interconnection Market

Interconnection fees are the charges that a telecommunications operator imposes on other operators for accessing its network. The level of interconnection fees has a huge impact on competition and therefore on the functioning of the mobile communication market, since these fees make up a significant part of the price that the end customer must pay to make a call.

According to EU regulations and the Swedish Telecommunications Act, telecommunications operators that are deemed to have significant market power in the interconnection market may only charge cost-oriented fees for interconnection.

On February 21 2002 the Swedish National Post and Telecom Agency (PTS) decided that Europolitan Vodafone and Tele2 have significant power in the interconnection market (ie, SMP status). PTS must now review whether Europolitan Vodafone's and Tele2's interconnection fees are cost oriented.

Telia AB has been treated as having significant market power in the interconnection market for several years and has been forced to lower its fees several times. Neither Europolitan Vodafone nor Tele2 have lowered their interconnection fees at the same rate; both companies currently charge more than Telia. Therefore many commentators expect that both Europolitan Vodafone and Tele2 will have to lower their interconnection fees.

Europolitan Vodafone has appealed the PTS decision at the county administrative court.

On March 25 2002 the court decided to suspend PTS's decision pending the court's decision.

Fees Reduced Again

On January 31 2002 PTS made a decision that will mean that Telia AB must lower its mobile interconnection fees to Skr0.92 as of March 1 2001.

Telia has appealed the PTS decision, asking for the fee reduction to be suspended until the interconnection fees have been examined in court. It's request for a suspension was heard before the county administrative court, which did not find in favour of Telia, and subsequently before the Administrative Court of Appeal. The Court of Appeal did not agree to suspend of the decision to reduce the fees, so Telia's interconnection fees were reduced to Skr0.92 on March 1 2002. The county administrative court has yet to make a decision on lowering the interconnection fees.

This is the fourth time that PTS has decided to reduce Telia's interconnection fees.

For further information on this topic please contact Rolf Olofsson or Anna Karin Pettersson at White & Case Advokat AB by telephone (+46 8 506 32300) or by fax (+46 8 611 21 22) or by email ([email protected] or [email protected]).