AGENDA
1. Introduction
2. Minutes of last meeting
3. Carrier Pre-Selection (Caroline Wallace, Oftel)
4. Update on LLU (Trevor Wood, Oftel)
5. Allocation of Radio Spectrum (Paul Jarvis, RA )
6. Mobile Market Review Update (Michael Richardson, Oftel)
7. Leased Line Update (Maeve Gallagher, Oftel)
8. Call to Mobile Update (Cathryn Ross, Oftel)
9. Business purchasing power in International Direct Dial (Chris
Bryant, Oftel)
10. AOB
11. Future meetings: Dates and Items
Note
of meeting of Large Business User Panel
Notes of a meeting
of the Large Business User Panel
25 April 2001 at OFTEL
Present:
Panel members
Cliff Parker PriceWaterhouseCoopers
Martin Rayment BAA
Vivienne Peters American Express
Sean Sergent P&O/CDO
Ian Forshaw Barclays
Glenn Morgan BA
Chris Bell BBC
Guest presenter
Paul Jarvis RA
OFTEL
Alan Pridmore (Chair)
Elizabeth Greenberg (Panel Adviser)
Maura Crawford
Caroline Wallace
Trevor Wood
Michael Richardson
Maeve Gallagher
Cathryn Ross
MEETING LARGE BUSINESS USER PANEL
ITEM 1 Introduction
1. The Panel agreed the agenda.
ITEM 2 Matters arising from January 2001 meeting
2. The Panel agreed the minutes.
3. Re: Item 7 Stakeholder Relations
Vivienne Peters attended a meeting of the CMA and Oftel. At the
meeting, VP reported that the LBUP was a valuable forum that could
not be replaced by meetings of the CMA and large businesses. VP
also raised the concern that large businesses and SMEs should be
represented on the Ofcom Consumer Panel. The first meeting will
take place at Oftel on 2 November 2001.
4. Re: Item 8 Mobile Number Portability
The Panel requested an update on progress from the new chair of
the MNP Focus Group at the next meeting.
5. Re: Item 9 ADR subgroup
An invitation for Panel members to attend the ADR workshop on 11
May was distributed. Oftel to inform Panel of the independent status
of the ADR Please refer to: www.oftel.gov.uk/ind_group/largebus/members/adrombudsman.htm
ITEM 3 Carrier
Pre-Selection (CPS)
6. Caroline Wallace gave a presentation to the Panel on CPS. Whilst
it was recognised that CPS might not be as important for large businesses,
due to their heavy investment in less cost routing equipment, it
was felt that it was important for representatives of large business
to be involved in the evolution of the CPS process. Panel members
were invited to attend the CPS Consumer Group meetings. Further
information on the CPS Consumer Group can be found at the following
website address: http://www.oftel.gov.uk/ind_info/network_inter/cps_icps.htm
Panel members wishing to attend the CPS Consumer Group meetings
to contact caroline.wallace@oftel.gov.uk
7. The Panel raised a number of issues relating to CPS:
- The Panel had noticed a lack of CPS marketing and was informed
that operators were concentrating on migrating customers from Indirect
Access before advertising for new CPS customers. Oftel did not maintain
a list of operators offering CPS, but panel members could consult
the list of attendees at CPS meetings to see which operators were
active in the CPS market.
- Oftel would monitor the CPSO marketing material to ensure claims
and comparisons were fair. Oftel's Consumer Representation Section
and Citizen Advice Bureaux had been briefed. The Panel urged Oftel
to be vigilante with regard to BT winback activity.
- As with any new service, the Panel saw a potential for problems
and felt Service Level Agreements were needed.
- Concern over possible post dial delay was expressed. Although
there were strict restrictions on group delay, Oftel needed to ensure
that expectations were managed particularly with CPS Operators'
(CPSOs) networks.
- Businesses needed to be aware of additional fraud possibilities
and ensure that call barring covered both the CPS and access operator
network. Different sets of call barring could be set on each network.
- As CPS represented a long term relationship between the user and
alternative operator, it was concluded that least cost routing was
probably more attractive to large businesses, partly due to the
use of 'time of day' options. It was noted that CPS for Featurenet
had not yet been trialled.
ITEM 4 Update on Local Loop Unbundling (LLU)
8. Trevor Wood updated the Panel on the progress of LLU. A LLU factsheet,
updated monthly, was published at the following web address:
http://www.oftel.gov.uk/publications/local_loop/index.htm
The factsheet gave information on the progress of co-location and
distance location sites. Work was progressing on completing sites
for the roll out of LLU.
9. The Panel was concerned that geographic coverage of LLU would
be disappointing with no competition outside of major towns. It
was felt that universal access to broadband was required to encourage
the roll out of LLU to small business parks.
ITEM 5 Allocation of radio spectrum
10. Paul Jarvis, Head of Private Business Systems at the RA, gave
the Panel a presentation on the processes involved in the allocation
of radio spectrum and the movement to a new allocation model. The
RA's mission was to assign channels more effectively and efficiently,
make better use of the spectrum and have the processes fully automated.
It was envisaged that in approximately 4 years time, businesses
could approach a dealer, complete a form on line and receive channel
offerings.
11. The Panel raised a number of points during the presentation:
- it was felt the full potential of radio spectrum had not been
realised. There was particular concern that businesses did not know
whom to approach for information when trying to make decisions,
e.g. on the use fibre cables or line of sight technology. Businesses
were directed to contact Bob Barren in the Technology Sectors Unit
of the RA;
- there was concern that greater levels of spectrum were needed
where the concentration of users was greatest not according to topography.
The RA stated that the onus was on the licensee to plan the base
station to achieve maximum usage;
- it was noted that a lot of UK radio spectrum was not in line with
European recommendations and that it was an ongoing challenge to
bring the spectrum into line with European standards. All UHF2 licensees
would be given 5 years to bring spectrum into line with recommendation
TR2508 (available on the ETSI website);
- The RA encouraged roaming from private to public networks under
the control of the system manager;
- The Panel had not found the RA website particularly visible or
user friendly. It was mentioned that the website was being revamped
and it should now be easier to find information on: http://www.radio.gov.uk.
RA have confirmed to Oftel that the RA do not maintain a notification
list for updated information.
12. The RA
did not have a version of Oftel's LBUP, nor did it have an obviously
appropriate forum to which interested LBUP members could contribute.
The Spectrum Management Advisory Group (SMAG) was a high-level advisory
non-departmental public body that reported directly to Ministers
on strategic spectrum issues. Although not an appropriate forum
for LBUP input, Panel members could look at the website for information:
http://www.smag.radio.gov.uk/index.htm
The Mobile Services Committee (MSC) was made up of Private Mobile
Radio (PMR) licensees, major users and manufacturers. Panel members
interested in management of radio spectrum were encouraged to consult
the website of the independent radio spectrum management review:
http://www.spectrumreview.radio.gov.uk
Any further questions could be addressed to paul.jarvis@ra.gsi.gov.uk
ITEM 6 Mobile market review
13. Michael Richardson updated the Panel on the findings of the
mobile market review. The 3 month consultation closed on 4 May followed
by 2 weeks for comments on submissions. A statement was expected
in July. In general, the review was positive about the effects of
competition and prices were found to be falling across the market.
The UK compared well to Europe in terms of price, quality, choice
and customer satisfaction. However, there were still areas of concern,
which were debated by the Panel.
14. The Panel felt that the profitability of particular mobile operators
made it hard to believe in the effectiveness of competition, particularly
when prices were consistent over networks yet profitability of operators
was considerably different.
15. There was concern over the tariffing of off-net calls and international
roaming. Prices had tended to either remain static or increase at
a time when overall prices were dropping. There was a need to analyse
whether specific groups of users were being penalised by the high
price of off-net calls, or whether the cost was off set by the lower
price of on-net calls. If offset, it may not be a problem for customers
or Oftel. Overall, the structure of centralised charging was seen
as a problem.
16. Panel members agreed that tariffing structures were confusing.
There was some evidence that the most aggressive operator won the
greater amount of traffic, often due to the special deals offered
to customers, particularly large businesses. The charges imposed
for unlocking SIM cards were a concern.
17. There was general agreement that it remained easier to get new
mobile numbers on take up of service with a new supplier than to
port numbers. Porting was considered unreliable, time intensive,
difficult and costly. It was believed that operators were aware
of customers' strength of feeling, but did little to facilitate
porting and allow customers to move easily between service providers.
18. Overall the Panel felt that the mobile market was not yet fully
competitive and Oftel needed to continue its control of anti-competitive
behaviour. Oftel confirmed its commitment to forward looking market
reviews every 2 years to assess whether market influence triggers
should be activated. The importance of the present review was stressed,
as the argument for further regulation was finely balanced. The
Panel was encouraged to respond to the consultation.
ITEM 7 Leased line update
19. Maeve Gallagher updated the Panel on leased lines activity.
Energis had requested that Oftel issue a direction under the Interconnection
Directive (ICD) relating to the provision of Partial Private Circuits
(PPCs). Oftel concluded that the PPCs were interconnection services
within the scope of the ICD and consulted on a draft determination.
Oftel also gave BT and the operators a deadline to agree terms and
conditions for leased line products. If the timescales were not
met and an operator made a request, Oftel would consider making
the determination. The timescales were 8 weeks from the 29 March
to hold discussions and a further 6 weeks for BT to make a product
available to other operators. Oftel was observing and facilitating
the discussions. It was hoped that BT and the operators would successfully
negotiate a product by May. Oftel planned to issue a statement in
Autumn 2001 commenting on its success.
20. Panel members reported that operators offering to take over
their leased lines had already made approaches. The products looked
favourable, particularly as there was general business dissatisfaction
with BT and leased lines.
ITEM 8 Calls to mobiles update
21. Cathryn Ross spoke to the Panel regarding the consultation on
the cost of calls to mobiles. The consultation period ended on 4
May 2001 and was followed by 2 weeks for comments on submissions.
The consultation document did not have a direct reference to the
workshop held with the LBUP in January, but the impact of the workshop
was apparent in Annex C. Oftel had come to a tentative conclusion
that there was not enough competitive pressure to constrain prices.
Calls to mobiles were not seen as competitive as a wholesale product,
and were probably not competitive on a retail basis. It was noted
that the existing price control on mobile termination charges would
end in 2002. Discussions were taking place on whether the price
controls should be extended. A Long Run Incremental Cost model was
being devised, and a statement on the conclusions of the consultation,
containing proposals for any possible continuation of the price
control, was planned for the Summer. Panel members were encouraged
to respond to the consultation.
22. The Panel commented that it was difficult to assess the level
of competition in the calls to mobiles market. Opportunities for
brokering deals were not as obvious as in the fixed line market.
ITEM 9 Business purchasing power in International Direct Dial
23. Cathryn Ross discussed businesses' buying power in the IDD market
with the Panel. As background, it was explained that BT and Concert
had asked Oftel to determine their ability to influence prices on
around 300 IDD routes. Oftel was considering whether it should look
at the supply of IDD as a whole, rather than continue its practice
of determining market influence on a route by route basis. The prevalence
of hubbing needed to be borne in mind when deciding the most appropriate
method, as well as consideration of the market pressures that BT
and Concert faced on a route by route or global basis.
24. When looking at the IDD market, Panel members were asked what
they considered when negotiating IDD purchases. The Panel made a
number of points:
- quality of service, reliability and resilience were key considerations;
- most Panel members selected specific routes and negotiated a package
of prices. It was common to give greater weighting to certain destinations,
bundle routes and negotiate rates on a level of traffic basis;
- Panel members tended to favour operators that tracked traffic
patterns, even if they did not offer the cheapest daily rates;
- There was a desire to terminate traffic with an operator that
inspired confidence, regardless of whether this was a partner of
the originating network operator;
- Panel members were not keen on dividing the routes into more than
3 geographic sections for negotiation;
- Members had experienced difficulty in negotiating routes with
very heavy traffic and did not want to be in position where routes
needed constant re-negotiation;
- data and IP traffic was considered more important than voice;
- there was a feeling that the international traffic market was
fairly competitive and that businesses could negotiate quite good
deals, but that SMEs and residential customers had little opportunity
to negotiate good deals;
- there was a difference of opinion about the value of indirect
access operators in the market. One panel member had found its IA
carrier to be unreliable, whilst another found its IA carrier to
be very competitive and resilient. A desired service would be the
ability for international business partners to be able to dial the
same IA operator to get cheap deals on inbound traffic to the UK
as part of the package;
- some panel members used alternative means of carrying traffic,
such as leased lines and VoIP;
- it was agreed that telecoms managers needed to re-appraise the
IDD market regularly and have proper examination procedures in place
to look at empirical data. The market was so competitive that very
short- or no-term contracts could be negotiated.
- The Panel had not noticed a change in the IDD market since the
requirement for BT to issue advance notice of tariff changes moved
from 28 days to1 day.
- The Panel felt it had a degree of buyer power in the outbound
international market. The inbound market tended to evolve around
the same players.
- Panel members reported a poor quality of service in some international
markets, e.g. India
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