LRIC - The final hybrid model - PTS-ER-2003:45

19/12/2003

In 2001, PTS conducted a review of the calculation models used for calculating cost oriented charges for fixed and mobile interconnection services and unbundled local loops. As a result of this review, work was initiated with the aim of determining cost oriented access and interconnection charges for the fixed telecommunications network.

In spring 2002, PTS initiated the work of developing a new calculation model. The new model is based on the Long Run Incremental Cost (LRIC) methodology, recommended by the EU-Commission and adopted by the majority of the Member States. The advantage of the LRIC-methodology is that it provides both new operators as well as TeliaSonera with a better basis for making investment decisions, leading to a more effective competition in the long run.

PTS has undertaken the work of introducing the new calculation model in cooperation with the operators, who have had the opportunity to participate in the development of the model and comment on the different sub-results developed during the process.

Today, PTS can present the final result of the work in the form of the final calculation model along with the costs of access and interconnection services calculated on the basis of the model.