HELSINKI, Finland—PTS, the Swedish national telecom regulator, has warned Sweden-based mobile operators that it will beginning using its wider discretionary powers if it feels that operators are “not working hard enough to add a superior competitive price edge” to the Swedish marketplace.
The PTS warning is being viewed as a “finger wagging” exercise to remind mobile operators of the agency’s wish to see greater price competition, particularly for mobile termination and interconnect rates. Telecom operators reacted to the PTS warning by claiming the agency is “misusing” its mandate and powers.
However PTS’s caution is certain to have broader implications for local and European regulators in Sweden, which are intent on cost-cutting measures to boost flagging revenues. Such measures have added pressure to telecom companies to maintain interconnect rates at what the PTS calls “the higher end.”
PTS is expected to adopt new guidelines that give the regulator greater flexibility in judging whether individual operators hold an “overly dominant” market presence. The PTS will then be empowered to enforce cost-based interconnect rates, not only on the incumbent mobile operator, but all licensed mobile operators in Sweden.
“The objective of cost-based interconnection rates is that call prices should not be prohibitively high for end users and that effective competition exists,” said Marcus Boklund, PTS executive.
The new guidelines will most impact mobile operators Tele2 and Europolitan Vodafone. “I cannot see that it would be in line with EU (European Union) regulations,” said Curt Andersson, the director of public policy at Europolitan Vodafone.
The telecom company said it would adopt a “wait and see” strategy before deciding whether to launch a legal challenge.
