Communications Regulatory Authority

AGCOM confirmed the position set forth in the public consultation document
(Resolution no. 414/04/CONS), according to which Telecom Italia enjoys a dominant
position in the relevant markets submitted to the preliminary investigation.
In adopting the draft regulation, besides taking account of comments expounded
by operators which participated in the public consultation, AGCOM also considered
market data collected until December 2005 and showing that Telecom Italia holds a
market share above 50%.
As to the development of markets under consideration, international traffic measured in
terms of minutes has progressively grown until 2002. This increase proved significant in
the 2000-2001 period, with a growth approximately equal to 13%. In the following year
the increase slowed down and then a decreasing trend started, mostly in the residential
market.
On the other hand, in the international sector a decreasing trend was reported in
terms of revenues in the 2000-2005 period, both in the residential and non-residential
markets. Such a drop was mostly due to the progressive cut in call rates. As a matter of
fact, while the international traffic dropped approximately by 4%, revenues decreased
approximately by 40% on the whole.
Therefore, based on Telecom Italia’s notification as an operator enjoying significant
market power in the markets for fixed-line international telephone services available to
the public for residential and non-residential users, AGCOM has set out the new
regulations it intends to impose on the dominant operator. In particular it has provided
for the following:
1. confirming the decision made with Resolution no. 289/03/CONS to exclude
Telecom Italia’s international residential and non-residential calls from control
by the price cap system;
2. lifting the obligation, pursuant to Resolution no. 152/02/CONS, to submit
international residential and non-residential call rates to control also by the price
test;
3. maintaining other obligations pursuant to Resolution no. 152/02/CONS with
regard to methods and deadlines according to which price terms of services
offered to residential and non-residential users shall be disclosed;
4. as to transparency obligations relating to commercial offers proposed by the
dominant operator, imposing the obligation to publish on the latter’s web site the
information about pricing and supply terms and about the terms of all
commercial offers, either on the same day a new offer is rolled out on the
market, or on the date of effect of changes to offers already launched on the
market. Rates, terms and conditions of supply shall be those for which the exante
verification procedure has been concluded, and shall be published by
reporting the date they came into force. The obligation is then maintained, under
article 70, paragraph 4 of the Code of Electronic Communications aimed at
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