- 1 - Paramaribo, May 2004 Paramaribo, May 2004 Regulation of interconnection tariffs – Access charges Mobile tariff process in Chile by Roberto Baltra Torres by Roberto Baltra Torres Head of Economic Regulation Head of Economic Regulation GOVERNMENT OF CHILE Ministry of Transport and Telecommunications Under-Secretariat of Telecommunications
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Regulation of interconnection tariffs – Access … 1 - Paramaribo, May 2004 Regulation of interconnection tariffs – Access charges Mobile tariff process in Chile by Roberto Baltra
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Paramaribo, May 2004Paramaribo, May 2004
Regulation of interconnection tariffs –Access charges
Mobile tariff process in Chile
by Roberto Baltra Torresby Roberto Baltra TorresHead of Economic RegulationHead of Economic Regulation
GOVERNMENT OF CHILE
Ministry of Transport andTelecommunications
Under-Secretariat of Telecommunications
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• Tariff freedom (general rule)• Obligatory services under law (Articles 24bis and
25)– Services provided by public and intermediary
service licensees via interconnections. Metering, billing, charging and collectionservices supplied to carriers by public servicelicensees (Supreme Decree No. 95 of 1994)
– Tariffs for the services provided viainterconnections enable licensees to cover thecost of use of their networks.
• Principal services regulated in the context ofpublic mobile telephony service licensees are:– Interconnection at network termination points– Access to other telecommunication service
• Fundamental principles of tariff-setting:– Tariffs charged to users reflect costs.– Guarantees the absence of cross-subsidization between
services and tariff areas.– Use of the efficient enterprise model generates
incentives so that the real licensee introduces technological improvements in its network and regulatedservices, thereby increasing their efficiency.
– The tariff-setting process enables any efficiency gainsachieved by the company as a result of improved management and technological development to be passed on to the consumer.
• Efficient enterprise (Act 18.168 Articles 30A and 30F):– Provides only regulated services– Only essential service provision costs– Using available technology– Maintaining quality– Determining costs of each service: investment
and operation including capital costs– Invisibility and non-regulated services: only a
portion of the costs is used, in accordance withthe proportion of the assets used.
• Rate of capital cost (Article 30B)– Risk-free rate of return– Systematic risk of company– Risk premium– Rate of capital cost = risk-free rate + systematic risk *
risk premium• Indexation
§ An index is determined for each service§ Based on published input price indices§ Representative of cost structure of efficient company.
Jan 00 Apr 00 Jul 00 Oct 00 Jan 01 Apr 01 Jul 01 Oct 01 Jan 02 Apr 02
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Monthly traffic per mobile subscriberMonthly traffic per mobile subscriber
Tráfico Promedio Mensual (generado) por Abonado Móvil 1/ (Minutos Efectivos)
Tipo de Tráfico Primer Trimestre 2003 (p) Primer Trimestre 2002 Variación (%) Móvil - Móvil 43,0 44,8 -4,1% Móvil - Fijo (S) 17,3 19,8 -12,3% Móvil LDI Salida 0,2 0,2 -9,0% Móvil Internet 0,0 0,0 — Móvil SSCC Salida 1,3 1,6 -19,1% Total 62 66 -6,8%
SUBTEL, sobre la base de información proporcionada por las compañías móviles y portadores.(p) Cifras preliminares.áfico promedio por abonado al mes se elaboró como el promedio de la relación de tráfico/número de abonados mensual, loes equivalente a la división entre el tráfico anual y el número de abonados a fines de cada año.
Average monthly traffic (generated) per mobile subscriber 1/
(actual minutes)
Type of traffic First wuarter 2003 (p) First quarter 2002 Variation (%)
First quarter 2003 (p) First quarter 2002 Variation (%)
SUBTEL, based on information supplied by mobile operators and carriers. P) Preliminary figuresAverage traffic per subscriber per month was calculated as the average of the ratio of traffic subscriber numbers per month equivalent to the division between annual traffic and the number of subscribers at the end of the year.
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Composition of traffic carriedComposition of traffic carried
Composición del Tráfico cursado a través de la Redes de Telefonía Móvil (Primer Trimestre 2003)
• Many network design calculations are based on the following equation:• Number of components required = Demand/
(Capacity per component * use)• Use is a parameter for reflecting the
combination of various effects of decreasing use:• Maximum design use: this usage parameter
ensures that network equipment is not overloaded by any change in demand, e.g. some types of equipment are recommended to be used at no more than 90% of their capacity.
• Use is a parameter for reflecting the combination of various effects of decreasing use (continued):– Use as a function of reasonable growth: in a real
mobile network, development of the network is in response to expected demand (months to years), depending on the modularity of the equipment and the time taken to make all preparations for getting the new equipment online.
• Takes account of non-homogeneous features of traffic.