The Russian Economic Development Ministry has proposed ending state regulation of tariffs in regions where there are high levels of competition between fixed-line communication services and mobile phone operators, Deputy Economic Development Minister Stanislav Voskresenky said on Friday in a letter to the Communications Ministry obtained by RIA Novosti.
The government sets tariffs for fixed-line end users in seven regional branches of national telecoms holding Svyazinvest and the Moscow City Telephone Network (MGTS), the capital's operator.
Mobile phone tariffs are set by the operators themselves, causing fixed-line operators to complain that competition with cell phone firms has become intense.
The Economic Development Ministry said in the letter that the government should examine competition levels.
"We suggest examining the competition between mobile phone and fixed-line operators in regional markets due to high mobile penetration," the Ministry’s letter said.
"After the analysis is completed, we can discuss a possible abolishment of state regulation on fixed-line communication tariffs for end users in the regions with a high level of competition" the letter said.
WHAT WILL OPERATORS SAY?
Long-distance phone operator Rostelecom, which will consolidate Svyazinvest's regional companies at the start of 2011, said abolishment of set tariffs would not change the situation for fixed-line operators.
Rostelecom spokesman Oleg Rumyantsev said the communications market was so competitive that in reality the government did not set the tariffs.
"The current price level is lower that the one set by the tariff service. So I think that nothing will seriously change for the operators. I mean if the state ends its right to regulate tariffs, the operators themselves will never raise prices," Rumyantsev said.
But MGTS liked the idea.
"The main goal of fixed-line tariff regulation is to make the service affordable and this has already been done in Moscow. As competition grows, we think that it would make more sense to abolish state regulation in such a competitive market," MGTS said in a statement.
"We have always supported this idea and we think that all operators must work in identical conditions, which will make companies design new service packages quicker," a company spokesman added.
MOSCOW, July 30 (RIA Novosti)