Disputes between H3G and each of Everything Everywhere, O2, Orange, T-Mobile and Vodafone about mobile termination rates for calls to ported numbers

23 September 2010

Disputes between: Hutchison 3G UK Limited (H3G)and each of O2 (UK) Ltd (O2), Orange Personal Communications Services Ltd (Orange), T-Mobile (UK) Ltd (T-Mobile) and Vodafone Limited (Vodafone) (together the MNOs)
Case opened: 14 April 2008
Case closed: 24 September 2010
Issue: H3G asked Ofcom to resolve disputes under Section 185(1) of the Communications Act 2003 (the Act) between H3G and the MNOs concerning variations proposed by H3G regarding the manner in which mobile call termination rates (MCT rates) are charged where calls are routed to a ported number.  
Relevant instrument: Ofcom resolved these disputes using its powers under Chapter 3 of Part 2 of the Act.

On 24 September 2010 Ofcom issued a final determination under sections 188 and 190 of the Act resolving these disputes to the parties in dispute and the parties which registered as interested parties. Please see related items for the non-confidential version of the final determination.

Update note: 11 January 2010

Ofcom has today issued a draft determination in relation to these disputes to the parties in dispute and the parties which registered as interested parties. Please see related item. Ofcom will be consulting on its proposals until 5 pm on 25 January 2010. Please send responses to:

Tom Thursby
Competition Group
Riverside House
2a Southwark Bridge Road

or by email to tom.thursby@ofcom.org.uk

End of update note

Update note 5 October 2009

Ofcom has reopened its consideration of this dispute following the publication of the Competition Appeal Tribunals judgments of 20 May 2008, 22 January 2009 and 2 April 2009 in the appeals lodged against Ofcom concerning the charge controls imposed on all five of the MNOs in the wholesale markets for termination of voice calls by Ofcoms Mobile Call Termination Statement dated 27 March 2007 (see further below).

Scope of the dispute:

The scope of the disputes is to determine whether the method of charging mobile call termination (MCT) rates where calls are routed to a ported number under the respective Interconnect Agreements between H3G and each of O2, Orange, T-Mobile and Vodafone is fair as between the parties and reasonable from the point of view of Ofcoms regulatory objectives. If Ofcom determines that the current method is not fair and reasonable, then Ofcom will determine what that method should be. The relevant period for the scope of this dispute is from 15 May 2003 up to the date of the final determination resolving these disputes.

If during the course of the investigation it appears that the determination of these disputes may have industry-wide application Ofcom will issue a separate formal policy consultation on the charging principle which should apply to calls to ported numbers. Any such consultation would provide all relevant parties with an appropriate opportunity fully to consider the impact of any change to the current charging mechanisms for calls to ported mobile numbers. It is likely that we would stay consideration of any affected elements of the disputes in these circumstances.

Procedural matters:

Guidance on the resolution of the dispute 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 dispute should be submitted to Ofcom by 12 October 2009.

Stakeholders interested in the outcome of this dispute should notify Ofcom by 12 October 2009, describing the relevance of the outcome of the dispute to their business. Stakeholders with relevant information and evidence in respect of this dispute should submit this to Ofcom by 26 October 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.

End of update note

These disputes concern an allegation by H3G that each of the MNOs has failed to agree to variations proposed by H3G to their respective Interconnection Agreements regarding the manner in which MCT rates are charged when calls are routed to a ported number. Currently, the recipient network operator is entitled to receive the donor operators MCT rate rather than its own.  H3G has proposed to each MNO that for such calls the recipient network operator should be entitled to charge its own MCT rate.

H3G alleges that commercial negotiations between the parties have failed to result in agreement.

Whilst H3G has submitted four separate dispute referrals, it suggests that Ofcom might decide to resolve these on an industry-wide basis.
Ofcom recognises that on the face of the referral, there appears 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.

Ofcom considers that the disputes meet the relevant statutory criteria and it is appropriate for Ofcom to handle them according to section 186 of the Act and, accordingly, Ofcom has opened an investigation.

However, Ofcom considers that these disputes raise issues which are currently being considered by the Competition Appeal Tribunal in the MCT appeals concerning the charge controls imposed on all five of the MNOs in the wholesale markets for termination of voice calls by Ofcoms Mobile Call Termination Statement dated 27 March 2007.

The determination of disputes raising such issues would create an unacceptable level of legal uncertainty for the parties to the disputes and, further, would involve an inefficient allocation of Ofcoms time and resources.

Therefore, Ofcom considers that there are exceptional circumstances in this case within the meaning of section 188(5) of the Act. Having regard, in particular, to the fact that the judgment will either supersede these disputes or otherwise have a significant bearing on them, Ofcom has decided to suspend the determination of these disputes pending the final ruling by the Competition Appeal Tribunal in the MCT appeals (for the avoidance of doubt, this includes both non-price control issues and the price control issues referred to the Competition Commission according to section 193 of the Act).

Ofcom will decide on the scope of these disputes and the procedure going forward following the Competition Appeal Tribunals final ruling.

Case Leader: Tom Thursby ( e-mail: tom.thursby@ofcom.org.uk)
Case Reference: CW/00983/03/08