1. G.Pūras FTR and MTR regulation Plans for 2013-2014 Giedrius Pūras Regulatory Accounting and Statistics Division Communications Regulatory authority of Lithuania www.rrt.lt 2013-08-30, Latvia Baltic Regulators' meeting 2013 1 psl

2. G.Pūras Overview of current TR regulation (1) No new market analysis was done since 2009: FTR and MTR regulation was updated on 24 th of December 2009 –EC recommendation on TRs was transposed –Symmetrical MTRs and symmetrical FTRs; –Balanced view was adopted – recognised the need for fair competition between fixed and mobile (same as in Rec.); –Glide path till 2012 was set (subject to change if pure LRIC calculated) –Specific POI regulation; 2013-08-30, Latvia Baltic Regulators' meeting 2013 2

3. G.Pūras Overview of current TR regulation (2) What‘s new in 2013? Provisional measures applied from 1st April 2013: –MTRs and FTRs reduced by 36%. –Peak/off-peak differentiation abandoned; –MTRs = 1,04 eurocent/min. (benchmark on pure LRIC) –FTRs = 0,06 eurocent/min. (MTR/FTR ratio BU-LRIC+ costs (2008) was applied to the benchmarked MTR) Pure LRIC model finalised and results published for national consultation till 18 th Sept. (TRs to be applied from 2014) –MTRs = 0,62 eurocent/min. (-40%); –FTRs = 0,21 eurocent/min. (-65%); 2013-08-30, Latvia Baltic Regulators' meeting 2013 3

4. G.Pūras Current glide path 2013-08-30, Latvia Baltic Regulators' meeting 2013 4 Provisional measures LRAIC+ Pure LRIC (?)

5. G.Pūras Impact on interconnect revenue 2013-08-30, Latvia Baltic Regulators' meeting 2013 5 Balanced F2M payments

6. G.Pūras MTRs in Europe 2013-08-30, Latvia Baltic Regulators' meeting 2013 6

7. G.Pūras Mobile: Retail price level (low) 2013-08-30, Latvia Baltic Regulators' meeting 2013 7

8. G.Pūras Current problems: 1.All operators fight further reductions of TRs: –Non-discrimination obligation & international traffic; –Why should LT be the MTR leader in EU? 2.Emergence of pseudo-mobile operator’s: –Cheap mobile retail flat rate plans; –Barrier-free acquisition of mobile numbers; –Asymmetry in regulation (flexibility of SMP regulation) 2013-08-30, Latvia Baltic Regulators' meeting 2013 8

9. G.Pūras Questions… 2013-08-30, Latvia Baltic Regulators' meeting 2013 9 psl Thank you! Giedrius Pūras _________________________________________________________________ Acting head of Price control and Statistics division Electronic communications department Communications regulatory authority of Lithuania Tel. +370-5-210 56 68 Fax. +370-5-216 15 64 e-mail: gpuras@rrt.lt

10. G.Pūras Valid from:till 200920092010201120122013.04.012014 1.Average (non - differentiated price)8,346,674,182,901,621,040,66* 2.Differentiated 2.1.Peak10,438,345,223,622,02 2.2.Off-peak5,214,172,611,811,01 Valid from:2010201120122013.04.012014 1.Average (non - differentiated price)1,571,260,950,610,25* 2.Differentiated: 2.1.Peak1,571,401,23 2.2.Off-peak0,810,570,34 2.3.Set-up0,760,480,20 FTR and MTR glide path till 2012 2013-08-30, Latvia Baltic Regulators' meeting 2013 10 Table 1. MTR glide path (EUR) Table 2. FTR glide path (EUR) *Note. FTRs and MTRS from 2014 subject to change because of national consultation till 18 th September 2013

11. G.Pūras2013-08-30, Latvia Baltic Regulators' meeting 2013 11 Overview: each party bears the costs of its 2Mb/s port and network configuration and Interconnect link is to be provided by operator, who offers cheaper solution Interconnect link costs are shared between parties by half (50/50); Network 1 Network2 Interconnect link (costs shared 50/50) 2 Mb/s ports & config. (own costs recovered) POI regulation