Disputes between H3G and each of O2, Orange and T-Mobile about donor conveyance charges

12 February 2008

Disputes between: Hutchison 3G Limited (“H3G”) and each of O2 ( UK ) Limited (“O2”), Orange Personal Communications Services Limited (“Orange”) and T-Mobile ( UK ) Limited (“T-Mobile”)
Case opened: 26 April 2007
Case closed: 17 August 2007
Issue: H3G has requested that Ofcom resolve disputes under Section 185(1)(a) of the Communications Act 2003 between H3G and each of O2, Orange and T-Mobile (“the MNOs”) over the level of donor conveyance charges currently payable by H3G to each mobile network operator under the respective interconnect agreement.
Relevant instrument: Ofcom resolved these disputes using its powers under Chapter 3 of Part 2 of the Communications Act 2003

Update note – 12 February 2008

On 17 October 2007 T-Mobile appealed Ofcom’s Determination of the dispute between Hutchison 3G and T-Mobile to the Competition Appeal Tribunal. Ofcom has decided not to contest this appeal. This decision was reached on the basis that the explanatory statement accompanying the DCC Determinations reflected a misinterpretation of General Condition 18 (“GC18”) and, contrary to paragraph 5.33 of the explanatory statement, it was open to Ofcom to exercise its powers to ensure industry-wide compliance with GC18.

In determining the disputes, Ofcom carried out a full assessment of the efficient costs of donor conveyance. This assessment, which was based on independent analysis, established that the costs that would be incurred by an average efficient operator are 0.2 pence per minute (split equally between the donor and recipient networks).

Ofcom has now written to all relevant operators subject to GC18 informing them that, going forward, Ofcom expects their donor conveyance charges to be set at 0.2pence per minute (split equally between the donor and recipient networks) in accordance with GC18.

End of update note

On 17 August 2007 Ofcom issued Determinations under Sections 188 and 190 of the Communications Act 2003 resolving these disputes.

Ofcom has corrected the Bulletin to revise the date from which the revised Donor Conveyance Charge takes effect for O2.

Please see below item.

Update note – 23 July 2007

Ofcom issued draft determinations in relation to these disputes to the parties in dispute on 20 July 2007. Please see the bottom of page.

Ofcom will be consulting on its proposals until 5pm on 3 August 2007. Please send responses to:

Sue Merrifield
Competition Group
Ofcom
Riverside House
2a Southwark Bridge Road
London
SE1 9HA

or by email to sue.merrifield@ofcom.org.uk

End of update note

H3G is in dispute with each of the MNOs as a result of a failure to agree a reduction in the Donor Conveyance Charges (“DCC”). H3G believes that the per minute charge for donor conveyance should be no higher than 0.1 pence rather than the existing 0.8 pence which has been in place since 1 January 1999 following Oftel Determinations (see link at end for "Mobile Number Portability Determination Requests : Oftel Explanatory Document"). It should be noted that these included a sunset clause of 15 months, i.e. to 31 March 2000.

Ofcom recognises that on the face of the referrals, there appear to be disputes between the parties that commercial negotiations have failed to resolve.

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 disputes:

The scope of the disputes is to determine whether the level of the donor conveyance charge payable by H3G to each of the MNOs is compliant with GC 18. If this proves not to be the case, then Ofcom will determine what that level will be. Ofcom will also consider the period for which such charges should apply.

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 4 May 2007.

Stakeholders interested in the outcome of these disputes should notify Ofcom by 4 May 2007, describing the relevance of the outcome of the disputes to their business. Stakeholders with relevant information and evidence in respect of these disputes should submit this to Ofcom by 18 May 2007.

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

Case Leader: Sue Merrifield (e-mail: sue.merrifield@ofcom.org.uk
Case Reference: CW/00952/04/07