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NHH resolution to bring down fixed-line fees

Reference interconnect prices at Hungary’s four dominant telcos could drop 10%-50% according to a draft resolution published by the National Telecommunications Authority (NHH) on Friday.

"Competition on the fixed-line telecom market could increase further if reference interconnect offers (RIOs) and one-off charges were reduced significantly," NHH president Dániel Pataki said. Pataki expects the current unwarranted variation in prices to decrease, and number portability and carrier selection to grow, as a result of the resolution.

The NHH, which obliged telcos to submit their RIOs in 2005, would cut telephone traffic fees by 10%-20% and one-off charges by as much as 50%. Incumbent telco Magyar Telekom Rt’s local call initiation and termination fees would have to come down 11% to Ft 1.47 per minute. Monortel Rt, which also uses a cost-based pricing model, would have to lower fees by 26% to Ft 2.25 on average, while Emitel Rt’s prices would decrease 11% to Ft 2.45 per minute.

Invitel Rt was the only dominant player to submit no cost-based pricing model, thus accepting 1.4 times Magyar Telekom’s RIO charges, or Ft 2.31 per minute, which represents a 20% cut.

Carrier selection will uniformly cost Ft 1,500, which is a 50% decrease on average, while number portability will be 30%-40% cheaper at Ft 2,600.

The draft resolution, which will replace prices set in june 2004, is expected to come to effect in a month, after market players had a chance to add their opinions. Hungarotel Rt, a fifth dominant player also obliged to submit a RIO, was not included in the draft and will be covered in a separate resolution within a few weeks, the NHH said.