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ITU meeting of Arab Regulators

This presentation discusses the interconnection issues and regulatory challenges faced by Orascom Telecom Algeria (OTA) as a new entrant in the Algerian telecommunications market. It highlights issues such as termination charges, leased lines prices, QoS, and fair competition, emphasizing the need for comprehensive rules to protect new entrants and ensure a smooth transition to a fully competitive environment.

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ITU meeting of Arab Regulators

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  1. ITU meeting of Arab Regulators Algiers 19-21 April, 2003

  2. Orascom Telecom Algériebrief presentation • Subsidiary of Orascom Telecom Group (Egypt) • Licence in Algeria as 2nd GSM operator awarded to OTA: August 4th, 2001 • Commercial launch in Algiers: February 15th, 2002 • Brand Name: DJEZZY GSM • Currently • 500 k+ subscribers • Network in 38 Willayas (on a total of 48) • 100 roaming partners

  3. OTAInterconnection with PSTN • PSTN operated by Incumbent Operator Algérie Télécom, under separation from Ministry, also our competitor as 1st GSM Operator • Currently no clear separation of GSM activities vs others • Interconnection Issues • National termination charges were easy to negotiate thanks to clear frame in the GSM licence • PSTN  OTA 6.5 DA (8 UScents)/min • OTA  PSTN (local switches) 1.2 DA (1.5 Uscents)/min • OTA  PSTN (transit switches) 2.4 to 2.8 DA/min

  4. OTAInterconnection with PSTN • Interconnection Issues (ctd) • International incoming termination charges are still a problem • PSTN  OTA (international In) 1.2 DA (1.5 Uscents)/min • OTA  PSTN (international Out) 80% of public rates • Direct costs of interconnection • All POIs are in the PSTN => We bear all transmission costs to the PSTN (LL or own Links) • Leased Lines • Public Price = No volume discount • QoS / Service Level Agreement • Bad QoS (esp. LL) not in line with basic SLA in contract • No offer for various Service Levels • Delivery Timing not reliable

  5. OTAInterconnection with other GSM • Interconnection Issues (ctd) • Termination charges could not be agreed upon • Arbitration escalated to ARPT • ARPT ruled based on cost analysis • Symetrical Termination Charge between 3 and 4 DA/min to be re-assessed after end 2003 • Agreement reached on 4 DA/min • Still we see problems of coherence • PSTN originated call GSM terminated is 6.5 DA/min when GSM1 originated call GSM2 terminated is 4 DA/min based on same underlying cost orientation principle • Our own cost analysis (Minimum Retail Price Method) showed costs in the range of 6 DA/min for a GSM termination

  6. OTAOther Regulatory Issues • Cross-subsidies by incumbent Operator • Their present GSM rates are obviously below costs • Arbitration has been escalated to ARPT • No licence fees paid for GSM by the incumbent operator • They did not participate directly or indirectly (e.g.Right of First Refusal) in the Tendering process • We see it as a breach of non-discrimination principle clearly stated in the Telecommunication Law • We see it as a breach of licence awarding principles clearly stated in the same Telecommunication Law • Definitely not in line with International Regulations and Practises

  7. OTAConclusion: new entrant expectations as regards Regulator Intervention • Regulator has to go deeper into Interconnection issues on all aspects… • Termination charges and Leased Lines prices • Direct Costs of interconnection • QoS and Service Levels • Delivery timing • Etc. • …and on all issues related to fair competition • This should result in a comprehensive set of rules clearly stated in the different licences/authorisations or at a higher level • This is critical in the first phases of opening to competition in order to protect new entrants (esp. Small ones) and guarantee smooth transition to a fully competitive environment

  8. OTA Thank You for Your Attention

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