Romtelecom is denied the right to raise rates at will

BUCHAREST (Reuters) – Romania said yesterday the country’s main fixed-line operator, Romtelecom, majority-owned by Greek OTE, can raise tariffs only with approval by the government’s telecoms regulator ANRC. Officials from the cash-strapped operator recently said Romtelecom plans to raise line rental tariffs, among Europe’s cheapest, by 20 percent while cutting rates for international calls by up to 40 percent to fight fierce competition. ANRC said in a statement that a law regarding telephony within the country and customers’ rights, which came into force at the end of July, allows it to pick suppliers serving the public at a minimum price. «Until the suppliers with a significant power on the market are nominated and until the ANRC takes a decision on the level of tariffs for supplying retail services, Romtelecom would be able to raise tariffs only with approval from ANRC,» it said. It did not specify when these suppliers would be nominated. Romtelecom CEO James Hubley recently told Reuters the company would focus on improving networks in big cities, rather than on providing service across the country, in the liberalized market where fixed telephony penetration is 20 percent. «All over the world, universal service was achieved before competition was introduced, not after,» Hubley had said. But ANRC said the new law allows it to «forbid excessive prices compared with the costs involved in supplying the service.»