Regulators typically seek to promote outcomes that maximise the long term benefit of end-users. Effective forward-looking regulation is extremely challenging, given the rapid pace of technological change and convergence in communications markets.

Our proven expertise in telecommunications engineering, market and economic analysis enables us to offer a comprehensive regulatory advisory service.

Options for regulated pricing of wholesale access services

For Vodafone New Zealand we reviewed a Government telecommunications regulatory options paper for the future pricing of wholesale copper and ultra fast fibre broadband (UFB) fixed access products. The Government’s proposed conceptual model encompassed a Regulated Asset Base (RAB) with an annual revenue cap in addition to price caps on individual wholesale products. We considered the proposed broadband anchor products, including the case for price regulation of Layer 1 services from 2020. In particular we examined the economic rationale for the proposed anchor products and recommended approaches for maintaining affordable broadband services in the transition from LRIC-based costing to an RAB regime.

Impact on mobile service quality due to spectrum re-assignment in Hong Kong

For OFCA, the Hong Kong regulator, we explored the potential impact on service quality and customers after a re-assignment of 3G spectrum (1.9 – 2.2GHz band) under a number of different possible re-assignment scenarios. As the analysis spanned several future years we forecast demand requirements and considered technology developments, including evolution of 3G and 4G technologies, multiple-input and multiple-output (MIMO) technology, and the use of femtocells. Other supply considerations included spectrum held and deployed by each mobile network operator for provision of mobile services, the Spectrum Release Plan, and the availability of additional spectrum for provision of 3G and 4G mobile services via refarming spectrum in other frequency bands.

Regulatory costing model for fixed wireless access in New Zealand

For a regulatory pricing review in New Zealand in 2015, we developed a TSLRIC model to calculate the average cost per line for a fixed wireless access (FWA) service using LTE technology in the 700MHz band. The model was based on network designs using radio propagation modelling for a sample of Exchange Service Areas (ESAs) which represented various geotypes defined for the country, encompassing semi-urban and rural areas. The objective was to calculate an FWA cost to compare with the fixed-line fibre cost (calculated by the regulator’s model) in order to determine whether fibre or FWA would be the least-cost technology for ESAs within specified areas over a five-year timeframe.

Market definition for fixed access and usage

Definition of a market is a key component of any competition policy. This definition provides a framework for policy makers in their role in promoting competition. We explored demand-side substitution in relation to both fixed access and usage (calls) in an Asian country. Firstly we investigated alternative approaches to implementing the SSNIP test and developed a number of econometric models to estimate cross-price elasticities. As we found that there were insufficient datapoints to produce reliable estimates, the study conclusions relied primarily on our international benchmarking analysis using data from comparable jurisdictions.

Regulatory analysis for telecommunications law reform

In response to a regulatory review and proposed major reform of the existing telecommunications laws and regulations of an emerging economy, we conducted a range of activities on behalf of the incumbent operator, including:

  • economic and regulatory analysis and advice on universal service provision and funding, access deficit funding, and interconnection costing and pricing
  • regulatory costing models for fixed and mobile services using an economic-engineering bottom-up LRIC-based approach
  • a business impact model to illustrate the effect of various regulatory changes on the expected financial performance of the operator.

Acting telecoms regulator in Samoa

We performed as the interim Regulator in Samoa for a period of six months. Legally vested with the authority of the telecoms regulator, we undertook all duties specified in the Telecoms Act, together with enhancing day-to-day operational processes and procedures in the Office of the Regulator. At the end of this period we continued to provide advisory and technical support, as well as facilitating the appointment and transition of the permanent Regulator.

Benchmarking mobile termination rates

On behalf of Telstra, we conducted a peer review of the benchmarking analysis and methodology used by the Australian Competition and Consumer Commission (ACCC) to derive draft rates for the mobile terminating access service. We identified a number of problems, including out-of-date benchmarking data, inappropriate assumptions and fundamental methodological errors. We also compared the draft estimate against a much larger sample of LRIC-based rates and found that the draft rates did not appear credible for a LRIC+ benchmark suitable for Australian conditions.

New regulatory framework

We provided advice and assistance to the Ministry of Communications and Information Technology in Samoa on the establishment of a new regulatory framework, including the provision of a regulatory ‘tool-kit’ of instruments necessary to enable the regulator to perform its functions. The tool-kit included a methodology to assess interconnection and the costs of the provision of telecommunications, a radio spectrum allocation plan, a telephone numbering plan, appropriately defined Universal Service Obligations and costing of such obligations and procedures to monitor service quality.