28 May 07: Hutchison 3G lodges appeal against Ofcom's SMP and price control decision in the Competition Appeal Tribunal
Hutchison 3G is challenging plans by the UK telecoms regulator to force it to charge substantially less for connecting phone calls to its network because of concerns that the changes threaten its long-term profitability. Last week H3G lodged an appeal with the Competition Appeal Tribunal against a decision by Ofcom that would require the UK's smallest mobile operator to cut its termination charges by 45 per cent. H3G is challenging both Ofcom's finding that it has monopoly power (SMP) in call termination, an issue which it has already successfully appealed in both the UK and Ireland, and various aspects of Ofcom's price control methodology, which it argues are particularly disadvantageous to a new entrant.
Market Analysis was retained by H3G to provide expert economic evidence in its previous appeals in both the UK and Ireland, and continues to do so. Many of the detailed economic arguments can be found in the paper by Binmore and Harbord, "Bargaining Over Fixed-to-Mobile Termination Rates: Countervailing Buyer Power as a Constraint on Monopoly Power” in the Journal of Competition Law and Economics, 2005, Vol. 1 (3), 449-472 (available on the Topical Articles section of our website). A summary of H3G's current appeal is available here. The Competition Appeal Tribunal's November 2005 decision which overturned Ofcom's previous SMP finding is available here.