Dispute between Cable & Wireless and T-Mobile about termination rates

22 May 2009

Dispute between: Cable & Wireless UK (C&W) and T-Mobile (UK) Ltd (T-Mobile)
Case opened: 16 December 2008
Case closed: 20 May 2009
Issue: C&W have submitted a referral asking Ofcom to resolve a dispute under section 185(1) of the Communications Act 2003 (the Act) between C&W and T-Mobile concerning the termination rate payable by T-Mobile for calls originated on T-Mobiles network and terminated on C&Ws network in respect of C&W customers using its fixed to mobile convergence (FMC) service.
Relevant instrument: Ofcom intends to resolve this dispute using its powers under Chapter 3 of Part 2 of the Act.

Update note 22 May

On 20 May 2009 Ofcom issued a determination to C&W and T-Mobile resolving the dispute. Please see related item.

End of update note

Update note 17 April 2009

In light of the information received from the parties, we have decided to remove the evidence set out under paragraph 1.16(d) of the further consultation document (i.e., the time of day traffic profile included in C&W’s business plan for the FMC service), amending paragraphs 1.16(d), 1.18 and 1.20 accordingly.

We have also decided to amend the non-confidential version of the further consultation document in order to inform stakeholders about the traffic weights set out at paragraph 1.16, by providing ranges for them.

This amended version of paragraph 1.16 includes a range of the time of day traffic profile of C&W customers’ outgoing calls to mobiles (1.16 (b)) and a range of the time of day traffic profile of C&W customers’ incoming calls from mobiles (1.16 (c)).

Please see related item for an amended version of the further consultation.

Ofcom will be consulting on its proposals until 5:00 pm on 22 April 2009.

End of update note

Update note – 15 April 2009

Ofcom has received comments made in response to the draft determination issued on 20 March 2009. In its response to the draft determination, C&W queried how compliance with the determination would be judged and argued that it should be given the ability to set different termination rates for different times of the day.

Ofcom has considered those submissions and considers that it may be appropriate for the resolution of this dispute to allow C&W to charge different rates according to time of day. In the draft determination Ofcom did not propose different termination rates for different times of the day and therefore stakeholders have not had the opportunity to comment on the appropriateness of time of day charging or the appropriate means for its implementation, if appropriate. On this basis, Ofcom considers it appropriate to issue a further consultation on this issue in order to ensure that stakeholders are given an opportunity to comment on the full extent of Ofcom’s proposals for resolving the dispute.

Ofcom has therefore decided to consult on (i) the appropriateness of allowing C&W’s charges to vary by time of day in resolving this dispute, as well as on (ii) the manner in which the time of day weights for such charges might be set, if appropriate.

Please see related item for the further consultation. Ofcom will be consulting until 5pm on Wednesday 22 April 2009. Please send responses to:

Damien Kelly
Competition Group
Ofcom
Riverside House
2a Southwark Bridge Road
London
SE1 9HA
or by email to Damien.Kelly@ofcom.org.uk

In light of the need for further consultation in this matter, Ofcom is of the view that exceptional circumstances have arisen since this dispute was accepted for resolution and that the requirement to resolve this dispute in four months, in accordance with section 188(5) of the Act, will not therefore apply in this case. Ofcom does not consider that it is appropriate to proceed with a resolution of the dispute until such time as parties have been afforded the opportunity to comment on Ofcom’s amended proposals. The additional consultation will close on 20 April 2009 and Ofcom intends to issue its final determination of the dispute on or before 20 May 2009.

End of update note

Update note 27 March 2009

In light of the comments received on the draft determination, we have decided to amend the non-confidential version of our draft determination in order to inform the stakeholders about our reasoning set out at paragraph 5.35:

5.35 We also considered that (%). [This paragraph contains our reasoning for considering that the MTR of a roaming partner is not an appropriate benchmark to resolve this dispute. This is because if the MTR of a roaming partner is not used as a relevant benchmark and there is no pass-through (i.e., if MTRs are not directly linked to the MTR charged by the roaming partner) it may provide an incentive to negotiate the cheapest national roaming rates].

Please see related item for an amended version of the draft determination.

Ofcom will be consulting on its proposals until 10 am on 30 March 2009.

End of update note

Update note 23 March 2009

Ofcom issued a draft determination in relation to this dispute to the parties on 20 March 2007. Please see related item.

Ofcom will be consulting on its proposals until 10am on 30 March 2009. Please send responses to as shown in the update note of 20 March 2009 below.

End of update note

Update note 20 March 2009

Ofcom will issue a draft determination to the parties in this dispute and the three parties which registered as having an interest in this matter on 20 March 2009.

A non-confidential version of the determination is currently being prepared and will be published Monday 23 March 2009.

Ofcom will be consulting on its proposals until 10 am on 30 March 2009. Please send responses to:

Damien Kelly
Competition Group
Ofcom
Riverside House
2a Southwark Bridge Road
London
SE1 9HA
or by email to Damien.Kelly@ofcom.org.uk

End of update note

Text published when case was opened

C&W and T-Mobile have failed to agree the level of the termination rate charged for the termination of calls originated on T-Mobiles network and terminated on C&Ws network using the FMC service provided by C&W to its customers.

Ofcom recognises that on the face of the referral there appears to be a dispute between the parties that commercial negotiations have failed to resolve. Ofcom has therefore accepted this dispute for resolution.

In resolving disputes Ofcom must act in accordance with the six Community requirements that give effect to Article 8 of the Framework Directive.

In summary, those requirements are:

  • to promote competition in communications markets;
  • to secure that Ofcom contributes to development of the European internal market;
  • to promote the interests of all European Union citizens;
  • to act in a manner which, so far as practicable, is technology-neutral;
  • to encourage, to the extent Ofcom considers it appropriate, the provision of network access and service interoperability; and
  • to encourage such compliance with certain international standards as is necessary for facilitating service interoperability and securing freedom of choice for the customers of communications providers.

Scope of the dispute:

The scope of the dispute is to determine the termination rate payable by T-Mobile for voice calls originating on T-Mobiles network and terminating on C&Ws network in respect of C&W customers using the FMC service.

Procedural matters:

Guidance on the resolution of disputes can be found in Ofcom's Guidelines for the handling of competition complaints, and complaints and disputes about breaches of conditions imposed under the EU Directives.

All representations on the scope of the disputes should be submitted to Ofcom by 23 December 2008.

Stakeholders interested in the outcome of this dispute should notify Ofcom by 23 December 2008, describing the relevance of the outcome of this dispute to their business. Stakeholders with relevant information and evidence in respect of these disputes should submit this to Ofcom by 9 January 2009.

Stakeholders who wish Ofcom to join them as parties to the dispute must provide evidence, as set out in Ofcom's Guidelines, that they are in dispute.

Case Leader: Damien Kelly (e-mail:damien.kelly@ofcom.org.uk)
Case Reference: CW/01004/11/08