IFT consults on the methodology to assess economic replicability of retail tariffs in Mexico

The Mexican telecoms regulator (Instituto Federal de Telecomunicaciones,  IFT) has today published a consultation on the methodology that will be used to assess the economic replicability of retail tariffs in different market segments. Frontier has advised the IFT in the preparation of the consultation material.

Economic replicability tests seek to ensure that operators can compete at a retail level by using regulated wholesale services owned by the Preponderant Economic Agent (the ‘Agente Económico Preponderante’, AEP). The segments covered by the proposed tests include mobile services, fixed voice services, fixed Internet services (on a stand-alone basis and bundled with fixed telephony and/or Claro video), and leased line services. The aim is to avoid so-called ‘margin squeeze’, where the AEP sets upstream and downstream prices at levels which make it unprofitable for other firms (relying on the regulated wholes services) to enter the market at all, or to do so in a way which means they can compete effectively with the AEP.

The published consultation documents include methodological details of different replicability tests specific to each market segment, together with model templates (populated with dummy data) and a user guide for each model applied to each  market segment.

Frontier regularly works with regulators and regulated firms in the telecoms sector across Europe, Latin America, Africa, Asia and the Middle East.

For more information, please contact Julia Caldano on julia.caldano@frontier-economics.com , or call +34 91 343 2350.

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Related Sectors:
Telecoms
Related Disciplines:
Regulation