Access pricing review for a telecommunications company
The Turkish telecommunications regulator (BTK) launched a new broadband access product called Port and Transmission (PT) broadband access in 2013. This product rehauled the pricing model used by our client, a wholesale broadband service provider, to charge retail Internet service providers (ISP) for access to its wholesale network. PwC was asked by our client to review efficiency characteristics of the PT wholesale broadband access product introduced by BTK and compare it to our client’s alternative specification. We also considered access conditions imposed.
The work we undertook involved the following steps to build the evidence base:
- Reviewed key regulatory principles in order to set prices and identified key questions that the client should answer when proposing an alternative pricing structure for wholesale access products.
- Reviewed the existing pricing structure by considering the costs and benefits for different stakeholders, against specific identified objectives. We also considered how the current pricing model used in Turkey compared to how wholesale access products are priced in other jurisdictions. In order to compare the prices charges across the various countries, we developed an average usage scenario, which helped provide a more realistic indication of the revenues the incumbent will receive.
- Reviewed client’s alternative pricing approach and made further changes to move towards a more optimal pricing model.
The client was provided with a rigorous report that provided the evidence base to take to the regulator for implementing an alternative wholesale access pricing regime. We also subsequently produced a report identifying barriers and policy consideration for accelerating investment in high-speed broadband in Turkey, linked to the access requirements.
