National Regulatory Agency for Electronic Communications and Information Technology of the Republic of Moldova

The National Regulatory Agency for Electronic Communications and Information Technology (ANRCETI – www.anrceti.md) issued and approved a set of special ex-ante obligations for JSC „Moldtelecom” given its significant market power on the market for wholesale access to network infrastructure at a fixed location (doc. in state language) and on the market for wholesale broadband access (doc. in state language), in order to diminish structural barriers and prevent the use of significant market power to the detriment of competition. The two administrative board decisions became effective on the date they were adopted - 28.03.2011.

The market for wholesale access to network infrastructure at a fixed location (market 4) consists of services of total/partial access to the local loop/subloop, made of copper wires, which connect the users location to the telephone network of JSC ”Moldtelecom”. The market for wholesale broadband access (market 5) includes self-supply bitstream services of broadband operators. Bitstream services represent wholesale ADSL access offered to providers at three aggregation levels in the network: local, regional and national.

Previously, the Agency, based on a market analysis, designated JSC „Moldtelecom” as a providers with significant market power on the two relevant markets. The Agency found that JSC „Moldtelecom” holds over 98% and 95% of the markets. Also, as a result of the analysis, it was concluded that on those markets, there are significant barriers to entry for other providers, there is no tendency of effective competition, whereas the regulation of these markets only through general competition protection legislation is not sufficient to remedy competition failure.

Through its decisions the Agency obliged JSC „Moldtelecom” to offer access to its local access network infrastructure and bitstream services to any provider requesting it. Also JSC ”Moldtelecom” will ensure: transparency in the provision of this type of access, including publication, within a 3-month timeframe, of reference offers for access to local loop/subloop and for bitstream services; non-discrimination of providers requesting services, inclusively in relation to its own retail broadband services; application of cost-based prices and implementation of separate accounting.

The obligation to publish a reference offer and that of non-discrimination of providers will give them the opportunity to ensure that they are offered access services equivalent to the ones supplied to retail Moldtelecom’s activities. Before the approval of a mechanism to control cost orientation of prices, the Agency established the quantum of maximum prices that JSC Moldtelecom may charge providers for its services of full and shared access to the local loop/subloop.

For the purpose of bitstream access implementation the Agency obliged „Moldtelecom” to offer requesting providers bitstream access at national and regional levels at 25% and, respectively 35% discounts for 4/1 Mbps capacity, and 50% discount for the same capacity at local level. For other capacities JSC „Moldtelecom” will propose LRIC cost oriented tariffs in its offer.

The Agency considers that the fulfillment of the aforementioned obligations will facilitate the entry of alternative providers on the market for broadband access and will create conditions so as to enhance competition in the country regions. As a result of this process, end users will benefit from a larger range of offers and services from a bigger number of providers on the entire territory of the country, which means the users will have long-term gains as a result of durable infrastructure-based competition.

The aforementioned decisions were developed by ANRCETI pursuant to the Law on Electronic Communications and according to the regulatory practices established by relevant EU Directives.

March 31, 2011