13 June 2011

Europe’s Annual Report On Bulgarian Telecommunications – An Example Of Finger-Wagging


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Image by World Economic Forum on Flickr

374711646_6f66bdc42d_zI know she is no longer the European Commission’s iron lady responsible for Information Society and I found it a pity when she took over the justice and fundamental rights resort.

Nevertheless, the Information Society‘s 2011 report on the Bulgarian telecommunications market bears her style and, when you read it, you can nearly perceive her wagging finger. So I chose to use her image as a story opener.

Going back to the report,  I could identify three important areas of Commission’s criticism.

Let me start with the

Mobile Termination Rates

While the mobile termination rate („MTR“) levels fell down to 6.65 €-cents per minute for peak traffic and 5.64 €-cents per minute for off-peak traffic in 2010, they still exceeded the EU peaktraffic average of 5.46 €-cents by 22%.

The practice of exempting calls originated outside the territory of Bulgaria from MTR regulation became a major issue of complaints to the European Commission since it led to higher termination charges for international incoming voice calls.
While the Bulgarian national regulator, the CRC, considered this market situation to be consistent with its notified market analysis, the European Commission urged the CRC to remedy the issue by uniformly enforcing regulated MTR levels to all types of calls irrespective of their origin.

Number Portability

The CRC announced the introduction of a one-stop shop procedure for all types of number portability as of 6 August 2010, which also made operational non-geographic number portability.

In effect, customers can submit a single application only to the receiving operator. According to the new procedure, the period to port a single number has been reduced to 7 days (10 days for a non-geographic number of the 700, 800 or 900 range or a group of geographic numbers), compared to the EU average of 7.7 days for fixed and 4.2 days for mobile numbers.
The wholesale charge for porting a single number amounts to € 9.2 (€ 15.9 for a non-geographic number), and a discount of 30% applies when porting a group of at least 500 numbers. A retail charge may be levied by the receiving operator, yet this has not become common practice.

In reality, however, the one-stop shop procedure shows flaws and that results in a comparably low amount of ported numbers – according to the CRC only 139 377 mobile numbers (1.38% of all mobile subscribers) and 60 337 fixed numbers (2.5% of all fixed subscribers) have been ported until the end of January 2011.

Consumer Protection

Do you remember the issue with the automatic prolongation of the individual contracts between consumers and mobile operators?
Well, that together with the number portability troubles became the major topics of the about 1 700 consumer complaints lodged at the CRC.

It is funny, but the CRC did not attempt to enforce an adequate consumer protection by undertaking legal proceedings against the mobile operators  – something to which the CRC would be empowered by law. It attempted to merely persuade the operators instead. This is very likely the reason why the European Commission has made the brief and politically correct statement that

With the endorsement of the CRC, all mobile operators have indicated their consent to remove automatic prolongation clauses from individual contracts.

A large portion (about 460) of the complaints on number portability (about 1000) referred to the new one-stop-shop procedure. Due to technical problems with M-Tel’s billing system delivered by Amdocs, many mobile customers experienced problems with incorrect invoices and inadequate service provision.

Further complaints referred to issues with the scope of universal service (in particular fax), availability of telephony services or invoicing.
The CRC has issued 340 penalties to operators, out of which 168 on number portability.

Wrap-Up

All in all, Bulgaria’s MTR remain among the highest in Europe, the number portability is making only a slow progress, if any, and the regulator is not capable to warrant an adequate consumer protection.

No wonder why the report is a finger-wagging towards Bulgaria.