10 June 2020

URCA issues Addendum to Final Determination titled “Wholesale Fixed and Mobile Termination Rates for SMP Licensees” (ECS 74/2019)

Today, the Utilities Regulation and Competition Authority (“URCA”) issues an Addendum to its 24 December 2019 Final Determination on “Wholesale Fixed and Mobile Termination Rates for SMP Licensees” in The Bahamas.

Within the 24 December 2019 Final Determination, URCA set interim termination rates and introduced those rates immediately upon publication. In the Final Determination, URCA also pointed out that it was not, at the time, in a position to give a definitive view on the appropriate approach for setting forward-looking wholesale termination charges in The Bahamas and further explained that the interim fixed and mobile termination rates set in ECS 74/2019 were not affected by the choice of methodology for setting termination rates going forward. URCA outlined that, given the significant time and financial implications of any decision for the stakeholders involved, URCA would make a decision on forward-looking rates at a later date and publish this in a separate document.

Against this backdrop, URCA now publishes this Addendum to ECS74/2019 setting out its final decision on the appropriate methodology for setting forward-looking, cost-oriented termination rates for BTC, CBL/SRG and Aliv. As such, this Addendum represents an addition to ECS 74/2019. The publication of this Addendum document concludes all outstanding issues relating to URCA’s public consultation on Wholesale Fixed and Mobile Termination Rates for SMP Licensees.

The full scope of URCA’s approach for setting forward-looking, cost-oriented termination rates is contained in Section 2 of the Addendum document. In particular, URCA has determined that:

• Fixed termination rates shall be set based on a Bahamas-specific fixed core network Bottom-Up  Long Run Incremental Cost model, complemented as necessary with off-model or additional analysis as may be required; and  
• Mobile termination rates shall be set based on a benchmarking of Pure Long Run Incremental Cost rates observed in other jurisdictions.
• URCA has responsibility for development of the LRIC model described above and will do so in consultation with the relevant SMP licensees. URCA shall publish details of this consultation process and related timelines in due course.

Copies of URCA’s Addendum document may be downloaded here.