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

JSC “Moldtelecom” has become liable to offer any requesting provider leased line services – terminal segments and trunk segments, including dark optic fiber, under terms and conditions as favorable as those provided for the company’s own sub-divisions or affiliated persons. This is one of the special ex-ante obligations imposed by the National Regulatory Agency for Electronic Communications and Information Technology (ANRCETI – www.anrceti.md) on JSC “Moldtelecom” due to its significant market power on the market for the provision of terminal segments (market 6 - doc. in state language) and trunk segments (market 8 - doc. in state language) of leased lines, regardless of the technology used for making available leased or reserved capacity. The corresponding Board Decisions entered in force on the date they were adopted – 20.12.2011 – and will be published in the Official Gazette of the Republic of Moldova.

The Board adopted this Decision in order to remove the barriers existing on the two wholesale markets and prevent abusive use of significant market power to the detriment of competition. The mentioned obligation was imposed pursuant to the Law on Electronic Communications, as a result of identification of markets no. 6 and no.8 as susceptible to ex-ante regulation and designation of JSC „Moldtelecom” as having significant market power on these markets (ANRCETI Board Decisions no. 22 and no. 23 of 15.09.2011). The detailed analysis of the two markets showed that JSC „Moldtelecom”’s shares on these markets are: 99,6% on market no.6 and 100% on market no.8, depending on the number of leased lines terminal segments and trunk segments provided.

According to the Board Decisions, in case that JSC “Moldtelecom” refuses to provide access to leased line services, the requesting provider shall have the right to address to the Agency for inspection of capacities and participate in it. In terms of ensuring transparency, in a four-month timeframe as of the entry in force of the mentioned decisions, JSC “Moldtelecom” shall develop and make publicly available on its Internet page the conditions for leased lines provision on the Reference Interconnection Offer (RIO) and in the standard Agreement for leased lines, which is part of the LLRO. These documents represent a public engagement of JSC “Moldtelecom” to provide leased line services to any requesting provider in all localities, under the terms and conditions as publicly announced.

If JSC “Moldtelecom” wishes to make amendments to the LLRO and the standard Agreement, it shall submit the draft document to the Agency, at least 30 days before enforcing it and publish it on its Internet page 15 calendar days before enforcement. Also, JSC “Moldtelecom” is liable to submit to the Agency the copies of the signed Agreements, with the due modifications, within 10 days after operating them, as well as quarterly reports on leased line provision.

The Agency also requires that, for leased line and associated services, JSC “Moldtelecom” apply prices oriented to long-run average incremental cost (LRAIC) and have separate accounting for all the activities associated with leased line provision. JSC “Moldtelecom” shall also have the implementation of the separate accounting audited, publish the annual audit report on its Internet page and present to the Agency annually, before May 31 of the year following the reporting year.

ANRCETI specialists consider that the enforcement of the two adopted decisions will stimulate competition and broadband development in the districts of Moldova, where the broadband market is dominated by JSC “Moldtelecom”. Under the conditions of ANRCETI decisions the alternative providers from Chisinau will have the possibility, by means of lines leased from JSC “Moldtelecom”, to extend their services to districts, whereas the providers in the districts – to procure Internet services from Chisinau under more competitive conditions.

The leased line service is an electronic communications service by means of which the requestor is offered a transmission capacity between two locations in the fixed network. The wholesale provision of this service means provision of leased lines to other providers of electronic communications, to be used for extending their geographic presence and launching their own services on the retail market, such as broadband access, mobile, fixed and audiovisual services, etc.

December 23, 2011