- Office of Electronic Communications

New rules for FTR and MTR settlement

On December 18 2020, the European Commission adopted a Delegated Act setting a maximum fixed voice termination rate (FTR) and a mobile voice termination rate (MTR). The Delegated act is a regulation which is binding in its entirety and directly applicable in all Member States of the European Union without having to be transposed into national law.

On 17 January 2021, the European Commission issued a corrigendum to the delegated act (publication date 19 January 2021) regarding the FTR applicable from the commencement of the application of the delegated act until 31 December 2021 in Poland (the originally specified FTR for this period was incorrect).

The issuance of the Delegated Act is the implementation of Article 75 of the European Electronic Communications Code (EECC).

Who should apply the new rates?

The provisions of the delegated act are addressed to all telecommunications undertakings that terminate voice calls on their fixed or mobile networks, regardless of the scale of the undertaking's activity.

The regulation is applicable to all telecommunications undertakings, including those that have not been designated by the President of UKE as having significant market power in the markets for call termination on fixed or mobile networks.

The regulation applies to all telecommunications undertakings, including those that have not been designated by the President of UKE as having significant market power in the markets for call termination on fixed or mobile networks.

Key provisions of the delegated act

Since when 

After the adoption of the Delegated Act, the European Parliament and the Council have 2 months to object. After that time, in the event of no objection, the Delegated Act will be published in the Official Journal of the European Union and its entry into force is scheduled for the day following its publication.

However, the application of its provisions is postponed (vacatio legis) until the first day of the third month after its entry into force. For example, if a delegated act enters into force in February 2021, its provisions are to be applied from 1 May 2021.

Rates

As regards the FTR, a transitional rate, higher than the final FTR, is applied in Poland and 11 other countries until 31 December 2021
 

In terms of the MTR, a glide path to the final rate to be applied from 1 January 2024 is foreseen. (table below).
 

Currency conversion from euro to zloty

FTR

The FTR in PLN (from the date of application of the delegated act until 31 December 2021) was set by the EC in the delegated act.
In subsequent years, the conversion from EUR to PLN is to be made every year (1 January of each year), taking into account the most recent average of the EUR - PLN reference exchange rates published by the European Central Bank in the Official Journal of the European Union on 1 September, 1 October and 1 November of each year.

MTR

In 2021 the conversion of EUR into PLN is to be made on the basis of the average of the EUR - PLN reference exchange rates published by the European Central Bank in the Official Journal of the European Union on 1 January, 1 February and 1 March 2021.

In subsequent years the conversion from EUR to PLN shall be made on an annual basis (1 January of each year) taking into account the most recent average of the EUR - PLN reference exchange rates published by the European Central Bank in the Official Journal of the European Union on 1 September, 1 October and 1 November of each year. 

The final FTRs and MTRs shall be the same for all EU/EEA Member States.
 

Calls originated outside the European Economic Area (European Economic Area)

In principle, the provisions of the delegated act only apply to calls originating in EEA countries. However, in the following cases the rates in the Delegated Act shall also apply:
1. when a (non-EEA) third country applies FTRs/MTRs no higher than those in the Delegated Act, or
2. (i) when the (non-EEA) third country regulates FTRs/MTRs according to a methodology which is consistent with the principles set out in Article 75 of and Annex III to the EECC, and
(ii) when that country is on the list as annexed to the delegated act.

Call termination service definition

Mobile voice termination service means the wholesale service required to terminate calls to mobile numbers that are publicly assigned numbering resources, namely numbers from national numbering plans, provided by operators with the ability to control termination and set the termination rates for calls to such numbers, where there is interconnection with at least one network, irrespective of the technology used, including interconnection ports.

Fixed voice termination service means the wholesale service required to terminate calls to geographic numbers and non-geographic numbers used for fixed nomadic services and to access emergency services, that are publicly assigned numbering resources, namely numbers from national numbering plans, provided by operators with the ability to control termination and set the termination rates for calls to such numbers, where there is interconnection with at least one network, irrespective of the technology used, including interconnection ports.
In principle, calls to numbers used for following purposes are excluded from the scope of the Regulation:
•    premium-rate services,
•    toll-free services,
•    shared-cost services,
•    machine to machine (M2M) communication.

How to apply the new rates? What about interconnection agreements?

The Delegated Act is generally applicable law, so its provisions are directly applicable, without the need for their implementation into the Polish national law.

Interconnection agreements should be adjusted by telecommunications undertakings to the provisions of the Delegated Act. Nevertheless, in the event of discrepancies between the provisions of the interconnection agreements and the Delegated Act, the provisions of the Delegated Act shall apply.
The priority of the provisions of the Delegated Act also applies to the reference offer used by Orange Polska S.A. i.e. in the event of a discrepancy between the reference offer and the Delegated Act, the provisions of the Delegated Act shall apply (in the remaining scope, the provisions of the reference offer remain binding).
 

Non-price related obligations

The Delegated Regulation refers only to a price obligation. Non-price related obligations imposed by NRAs when regulating markets, are outside the scope of this Delegated Regulation.

The Delegated Regulation is without prejudice to the powers of NRAs to define relevant markets, conduct the three criteria test and impose remedies other than price control in accordance with Article 64(3), 67 and 68 of the EECC. Consequently, the non-price obligations that are currently imposed by NRAs on operators with significant market power in relation to fixed or mobile termination services are not to be affected by the entry into force of this Delegated Regulation, and will therefore remain valid until they are reviewed, in accordance with Union and national rules.

How the rates were calculated

Voice termination rates have been established based on the bottom-up LRIC methodology. For this purpose, the European Commission has prepared 2 cost models (for mobile and fixed networks) supplied with data from EU operators. The European Commission organized for interested parties two public consultations on the scope of the regulation. Telecommunications operators, business organizations, associations, citizens and public sector institutions presented their positions. BEREC also provided its opinion on the draft Delegated Act.