REGULATORS TARGETING WIRELESS INTERCONNECTION.

Despite growing competition in retail markets for mobile services, regulators have been paying increased attention to virtual monopolies in mobile call termination markets, according to "Wireless Interconnection Attracts Regulatory Attention Around the World," a new Yankee Group Global Regulatory Strategies report. The key issues are high and non-cost-based, fixed-to-mobile call termination charges-- particularly in calling party pays (CPP) nations--and high international roaming and call charges.

"Moves to impose stricter regulations on mobile operators come at a time of worldwide consolidation, when many of these operators confront financial difficulties," said report author Dianne Northfield, Global Regulatory Strategies program manager. "As always, regulators face a delicate balancing act and the risks of regulatory actions are heightened under current depressed market conditions. The success of mobile operators and services represents the key to achieving electronic communications policies in many nations."

Regional trends include the following:

In many Asia-Pacific nations wireless interconnection under regulatory review and actions to force call termination charge reductions are increasing.

In Europe, designation of mobile operators as holders of significant market power, with regulated interconnection obligations, has increased. The new European regulatory framework opens potential for greater regulation of mobile operators.

In Latin America, more regulators are forcing reductions in fixed-to-mobile call termination rates, including setting of charge ceilings.

Canada has not adopted a CPP model. Instead, consumers pay to originate and receive calls. In the U.S., the proliferation of flat-rate, bundled minute or bucket calling plans have ultimately rendered the move to CPP moot.

In mobile party pays and CPP nations alike, carrier compensation and regulatory models for interconnection pricing continue to generate widespread debate and controversy.

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