Hutch 3G UK Appeals over Termination Cuts

Hutchison 3G UK has filed an appeal against a regulatory decision to reduce its termination charges by 45 percent, calling the ruling "absurd" and "'anti-competitive," the Financial Times has reported. The company has lodged the appeal with the UK's Competition Appeal Tribunal.

In an interview, 3 UK chief executive Kevin Russell told the newspaper that the decision by the regulator, Ofcom would effectively result in subsidies to the incumbent operators.

Russell said 3 UK is a already a "net outpayer" to the other operators in terms of interconnection charges, which would be logical considering the operator's smaller market share. He estimates that termination charges payments would double to around £100 (US$190) million this year if Ofcom's ruling is upheld.

'What you end up with is this illogical and absurd situation where you have a new entrant... actually cross-subsidizing significant amounts of money to incumbents,' he said. Those incumbents used the money to increase their competitiveness in the marketplace, to 3's disadvantage, he added.

Hutchison 3G UK is estimated to have ended Q1 2006 with just over 3 million customers - representing a market share of about 4.5% according to figures from The Mobile World subscriber database."

Posted to the site on 29th May 2007