Axon Consulting has recently completed the review of the net cost of universal service for Portugal Telecom, for the years 2007-2009.

This incumbent operator review forms part of a range of services carried out on behalf of the Portuguese telecoms regulator, Anacom.

The project covered a critical analysis and review of the methodological approach followed by the operator in the first practical implementation of the guidelines set by ANACOM, which has resulted in adjustments being made in the operator’s methodological and calculation assumptions and choices. As a result of the review, the provisional net cost of universal service for the years 2007-2009 has been preliminary established at 66.8 million EUR, which implies a decrease of 12.8 million EUR (-16%).

Axon Consulting has carried out various projects related to the net cost of universal service on behalf of European regulatory agencies in recent years (including Italy’s AGCOM, Spain’s CMT and Greece’s EETT), along with a range of similar projects for the European Commission and regulatory bodies in other geographies.

To read more about this news item, please click in the following links (articles and releases in Portuguese)*

*Axon credited under its former name, SVP advisors

20 June 2013 – ANACOM’s determination 
Decisão sobre os resultados da auditoria aos custos líquidos do serviço universal da PTC (2007-2009): click here
Auditoria aos custos líquidos do serviço universal da PT Comunicações (2007-2009) – decisão final: click here

26-27 June 2013 – News ítems and press releases
Jornal de Negocios: click here 
Economico: click here

1 August 2013 - ANACOM’s determination
Resultados finais da auditoria aos custos líquidos do serviço universal (2007-2009) ressubmetidos pela PTC – consulta: click here
Relatório de auditoria e respetiva declaração de conformidade – Axon´s report: click here

2 August 2013 – News ítems and press releases
Jornal de Negocios: click here


Axon has reviewed Telefónica de España’s cost accounting results and Net Cost of Universal Service amounting to 48.3 Million EUR. 

The CMT has recently published the results of the review of Telefónica de España’s regulatory cost accounts corresponding to the fiscal year 2011.

The results extracted from these revisions, prepared under the FDC-HCA/CCA and LRIC standards, are generally used by the CMT for various regulatory applications, including the general vigilance of the proper functioning of fixed-line markets and to inform the setting of wholesale rates. As integral part of this assignment, Axon has also carried out a verification of the calculation of the net cost associated to the Universal Service Obligations for the year 2011 imposed on Telefónica de España as the Universal Service Provider in Spain. Based on the results of our review works, the CMT has established the Net Cost of Universal Service in Spain at 46.3 million EUR.

In line with previous CMT’s decisions, it is expected that Spain’s biggest operators, namely Orange, Vodafone and Telefonica (both, fixed and mobile arms), are obliged to contribute to the national Universal Service fund and cover these costs for the provision of the Universal Service.

To read more about this news item, you can access to the official documents published by the CMT (files in Spanish)*:

  • CMT’s resolution on the review of Telefónica de España’s FDC-HCA/CCA regulatory accounting system: click here
  • Axon’s report on the review of Telefónica de España’s FDC-HCA/CCA regulatory accounting system: click here
  • CMT’s resolution on the review of Telefónica de España’s LRIC regulatory accounting system: click here
  • Axon’s report on the review of Telefónica de España’s LRIC regulatory accounting system: click here
  • CMT’s resolution on the review of Telefónica de España’s Net Cost of Universal Service: click here
  • Axon’s report on the review of Telefónica de España’s Net Cost of Universal Service: click here

*Axon credited under its former name, SVP advisors


Axon Partners Group Consulting (Axon Consulting) has supported the Telecoms Regulator in Costa Rica (SUTEL) in shaping its telecoms sector policy, adding to its increasing list of institutional projects.

Axon Consulting has provided advice to the Telecommunications Superintendency of Costa Rica (SUTEL) during 2013 on issues related to setting telecom tariffs, analysing the cost data provided by the fixed telecom incumbent (ICE) and ensuring that the methodologies and tools used for policy purposes in Costa Rica are aligned with international best practice. This advisory included a high-level analysis of the telecoms market.

In addition, Axon Consulting has assessed the SUTEL’s review of the methodology and principles for the implementation of regulatory cost accounting systems. This assessment included a detailed evaluation of the cost accounting and accounting separation obligations and the definition of the procedures for implementation, preparation and revision of cost accounting results.

As a result of Axon’s work, new fixed telecom tariffs have been established (available here) and the SUTEL has issued a public consultation on regulatory cost accounting and accounting separation obligations (available to download here).

Recently, Axon Partners Group was also selected through a competitive tender process by the SUTEL to develop a Bottom-Up LRIC (BULRIC) costing model for mobile networks in Costa Rica. The objective is to move the development of mobile services in Costa Rica forward by setting end-user (price cap) tariffs that are applied to the mobile telephony market (voice, data and messaging), as well as the wholesale (interconnection) tariffs.

 


Axon Partners Group Consulting has been commissioned by the Telecommunications Regulatory Authority of the Sultanate of Oman (TRA) to support in the establishment of wholesale charges for the next five years; an initiative that will exert a relevant influence in shaping the evolution of the sector in coming years.

As part of this assignment, Axon is assisting the TRA in a Public Consultation process regarding the methodology to be applied in Bottom-Up Long-Run incremental Cost (BULRIC) modelling.

A paper that describes a number of key issues for the development and implementation of BULRIC models for fixed and mobile networks has been published by the TRA, in order to encourage stakeholders to contribute their views.

For more information on the Public Consultation process, please click here.


Telefónica Mexico has commissioned Axon Consulting to carry out an independent study to explore the impact that current pricing practices have on the Mexican mobile market, paying particular interest to the discrimination between on-net and off-net calls.

The potential effects and economic rationale of on-net/off-net price discrimination by dominant operators has been widely explored in academic literature. However, to the best of our knowledge, this is the first time that the effects of specific pricing practices and price plans on the consumers and competition have been assessed in a quantitative manner.

Axon Consulting’s report has been appreciated by policymakers and industry specialists. In an article published in the national press on March 17 2014, Senator Gerardo Florez described the study as ‘rigorous and solidly built from a methodological point of view’.

On 24 March, President Peña submitted to the Mexican Senate the much anticipated draft secondary law for Telecoms Reform for its debate and eventual approval. The draft secondary law incorporates a provision forbidding the so-called ‘preponderant’ operator to discriminate between on-net calls and off-net calls.


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