Telecom Securicor Cellular Radio Ltd

Vodafone Ltd

NOTICE UNDER SECTION 12(2) OF THE TELECOMMUNICATIONS ACT 1984

PROPOSED MODIFICATIONS TO THE LICENCES OF BT CELLNET AND VODAFONE

The Director General of Telecommunications (the “Director”) in accordance with section 12(2) of the Telecommunications Act 1984 as amended by the Electronic Communications Act 2000 (the “Act”) hereby gives notice that he proposes to make modifications to the licence granted to Telecom Securicor Cellular Radio Ltd (“BT Cellnet”) on 22nd March 1994 and to the licence granted to Vodafone Ltd (“Vodafone”) on 9th December 1993, by the Secretary of State for Trade and Industry under section 7 of the Act (together hereinafter referred to as the “Licences”).
2. The modifications to the Licences which the Director proposes to make are to insert a licence condition (the “Rollover Condition”) in Part K of Schedule 1 to each of the Licences, as set out in the Schedule below. The effect of these modifications would, in the circumstances indicated in the Rollover Condition, be to extend, for one year beginning on 1st April 2002 and ending on 31st March 2003, the controls on termination charges which presently exist under each of the Licences. Pursuant to condition 70 of each of the Licences, the present price control for interconnection charges for BT Cellnet and Vodafone will end on 31st March 2002.
3. The Director is currently undertaking a review of competition in the market for calls to mobile phones to determine what regulatory action, if any, is required when the current controls expire. OFTEL expects to complete its review and make proposals for any further controls in July 2001. OFTEL would at the same time initiate the statutory consultation procedure for any necessary licence modifications. Should either BT Cellnet or Vodafone object to any such proposed modifications to their Licences, then the Director may refer the matter to the Competition Commission (“Commission”) under section 13 of the Telecommunications Act.
4. The reason for the proposed modifications is to provide a mechanism so that, in the event of any modifications to the Licences implementing new regulatory controls being referred to the Commission, the existing controls on termination charges will be maintained until the Commission has reported its findings and any recommendations to remedy any effects adverse to the public interest are able to be implemented.
5. The consultation procedure comprises two stages. In the first stage, representations on or objections to the proposed modifications may be made to Vincent Affleck, OFTEL, 50 Ludgate Hill, London EC4M 7JJ (telephone 020 7634 8819, e-mail vincent.affleck@oftel.gov.uk) by no later than 7th June 2001. Any objection should clearly state that it is an objection.
6. In the second stage, interested parties are invited to send comments to Vincent Affleck, details as above, by no later than 21st June 2001 on representations and objections received in the first stage.
7. Any confidential information should be clearly marked as such and separated out into a confidential annex. All representations received by OFTEL, with the exception of material marked confidential, will be made available for inspection in OFTEL’s Research and Intelligence Unit and may be published. Appointments to view written comments, which must be made in advance, can be arranged by contacting OFTEL’s Research and Intelligence Unit on 020 7634 8761.
D. A. Edmonds, Director General of Telecommunications
Schedule
(Draft) Condition 70A
Rollover of Control of Interconnection Charges
70A.1  If by 31st January 2002:

(a) the Director, having given notice and considered representations or objections in accordance with the requirements of Section 12(2) and (3) of the Act, has submitted to the Licensee proposals for Condition 70 of this Licence to be replaced or modified; and
(b) the Licensee has objected to those proposals in whole or in part under Section 12(4B) of the Act; and
(c) the Director has made a reference to the Competition Commission under Section 13 of the Act in relation to any part of the proposals (including the whole) to which the Licensee has objected as referred to in paragraph (b) above, but in relation to no other matter,

the Director may determine that, in order to extend the period of control provided for in that Condition, any or all of the provisions in Conditions 70A.2 and 70A.3 below shall take effect.
70A.2  In Condition 70.1 of this Licence, the following text of a new paragraph (d) shall be inserted after paragraph (c):

“(d) during the Year 2002-2003, the amount in pence per minute that is the product of the amount calculated with 70.1(c) above multipled by the sum of 100% and the Controlling Percentage (deducting that Percentage if it is negative).”

70A.3  In Condition 70.4 of this Licence, the following text of a new paragraph (c) shall be inserted after paragraph (b):

“(c) If it appears to the Director that the Licensee is likely to fail to secure that the Average Interconnection Charge for the Year 2002-2003 does not exceed the level specified in 70.1(d) above, the Licensee shall make such adjustments to the Interconnection Charge in that Year as the Director, after consultation with the Licensee, considers appropriate for the purpose of avoiding that failure, and so directs the Licensee.”
4th May 2001.