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HAKOM made possible the lowering of prices for outgoing calls to neighbouring non-EU countries

 Zagreb, 30 March 2015

The Croatian Regulatory Authority for Network Industries (HAKOM) adopted decisions making it possible for Croatian operators to decrease costs of Croatian users' outgoing calls to non-EU neighbouring countries. HAKOM adopted new regulatory decisions and changed the former way of regulation based on European Union rules thus making Croatian operators equal to non-EU operators.

Due to former regulation based on EU recommendations, relations between EU and non-EU operators were unequal to the detriment of EU operators and their users. This refers to prices mutually charged by operators for calls made between their users, for example prices that have to be paid by Croatian operators to Serbian operators if a Croatian user calls someone in Serbia. At the wholesale level, Croatian operators had to charge a regulated price for call termination for calls terminating in their own networks and originating in a non-EU operator's network, which was based on real costs regardless of the network in which the call originated. Thus a call made by a user from a non-EU country and transited by an EU operator was regulated at the wholesale level by means of maximum permitted prices. If a call was transited by a non-EU operator, operators were able to agree on a call termination price at the commercial level. In practice, total traffic, including traffic originating in non-EU countries, is transited to our operators only by EU operators. This means that non-EU operators have been avoiding the European regulatory framework by transiting traffic through one of the Member States thus automatically achieving guaranteed call termination prices prescribed for the EU which are significantly lower than prices that may be charged by them according to the rules in their countries. At the same time, they have no interest in negotiating with European operators, including Croatian operators, to lower their wholesale call termination prices to similar levels based on real costs.
 
HAKOM recognized an unequal relationship and found that asymmetric prices result in significantly higher retail prices paid by users who are calling users in non-EU countries, that is, prices of such calls are significantly higher than calls to EU countries. At the same time, a user from a non-EU country who is calling a Croatian number pays a lower price, in this case a regulated price, since in practice all such calls are transited through EU operators.
 
The new regulation of call termination is based on the originating traffic regardless of whether it was transited from the EU or outside of the EU. In this manner Croatian operators no longer have to charge regulated prices to other operators for any call which did not originate in the EU, which gives them greater negotiating power and a better negotiating position, particularly in the neighbourhood. Since new regulation may result in the lowering of prices paid by Croatian operators for international calls made by their users and in the lowering of costs incurred by our operators as a result of calls made by their users, the decisions will result in lower prices for international non-EU calls of users of Croatian operators, in particular for calls to the neighbouring countries.
 
The European Commission gave prior consent to HAKOM's decisions, which have been eagerly awaited by other European Union Member States since Croatian regulatory decisions now constitute EU practice which will be followed by many other Member States.

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