MTR Cuts Promote Competition, But Likely To Trigger Consolidation

Italy's telecoms regulator, Autorita per le Garanzi Comunicazioni (AGCOM), announced that mobile termination rates (MTRs) will be cut by 40% by July 1 2013. AGCOM introduced the measure following a request by the European Commission. The cuts to MTRs will reduce tariffs from between EUR0.035 and EUR0.025, the rate active from July 1 2012, to between EUR0.017 and 0.015 on January 1 2013. There will be a further cut on July 1 2013, resulting in MTRs having a flat rate of EUR0.0098. From July 2013 Telecom Italia Mobile , Vodafone , Wind and H3G will operate with the same MTRs. CFW welcomes the cuts to MTRs, which will benefit consumers and increase competition. However, we note that cuts may have the unintended consequence of increasing consolidation in the market.

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