Tarifica Anticipates Further Falls in International Leased Line Rates in Europe

London, Tuesday 21st January 2003: In view of the recent conclusion of the leased line sector inquiry carried out by the European Commission, Tarifica (www.tarifica.com), the telecommunications pricing specialists, compared the charges for international half-circuits in Europe and discovered price cuts of up to 56 per cent.

The European Commissions main reason for the initial launch of the leased line sector investigation in 1999 were complaints by user organisations that tariffs remained high and unrelated to cost despite the roll-out of competing infrastructure by new entrants. In an initial report, the Commission pointed to high charges and different pricing structures across all Member States. The investigation lead to considerable price cuts and a number of measures by national regulatory authorities regarding both pricing and provision of leased lines.

Tarifica looked at the charges for international half-circuits of 2 Mbps offered by incumbent operators in Denmark (TDC), France (France Telecom), Germany (Deutsche Telekom), Spain (Telefónica) and the UK (BT). All prices are taken from Tarificas tariff database and do not consider discount schemes.

The chart displays the monthly charges for a 1-year subscription to the service. It shows that similar prices now apply for the whole continent, with the highest rates being charged by BT. Deutsche Telekom offers the lowest rates to Luxembourg whereas TDC and Telefónica provide the cheapest prices to USA and Hong Kong, respectively.

Among the analysed operators, the highest price cuts since 1998 have taken place in Denmark. Incumbent TDC has decreased its rates for leased lines to Luxembourg by 39 per cent, USA by 56 per cent and Hong Kong by 30 per cent. Prices have also fallen considerably with Deutsche Telekom which now, for example, charges € 10,741 less for leased lines to the USA, a decrease of an estimated 41 per cent.

The national regulatory authorities have already adopted a variety of measures including wholesale offers to competitors, which will further increase competition at the retail level. In addition, the lower prices will give customers cheaper access to telecoms services. The extent as to which the Commissions guidelines become reality will, however, depend on the development of the economic situation in Europe and the regulators influence in the respective country.

Martina Gerle
Research Analyst
Tarifica @ PBI Media LLC
mgerle@tarifica.com
http://www.tarifica.com

NOTE TO EDITORS: Tarifica @ PBI Media LLC is an independent telecommunications research body and consultancy with a long history as a centre of expertise in the pricing arena.

Tarifica was established in 1976 as the first consultancy to track telecommunications tariffs, offers a unique repertoire of tariff-related products and services covering fixed and mobile services in Europe, the Middle East, Africa, the Indian subcontinent, the Asia-Pacific Region and Latin America. More than one million tariffs from over 150 operators in 120 countries are constantly being updated by our multi-lingual specialist team, which collects data by primary research among the operators themselves.