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Research Reports in 2023

Issue Date:2024/03/19

The Research of Mobile Network Cost Model and Mobile Termination Rate中文


Mobile Termination Rate (MTR) is the cost incurred when a telecom operator uses the network of another telecom operator to provide call services. In order to avoid price squeeze, the National Communications Commission (NCC) must regulate MTR. Since 2010, the NCC has referred to regulatory framework of benchmark countries and introduced MTR cost model to calculate MTR. The NCC has lowered MTR year by year to the level of 0.407 NTD/minute in 2024, which is in line with international regulatory trend of lowering MTR.

According to the “Regulations Governing Interconnection involving Significant Market Power”, the NCC determines MTR for operators with significant market power in mobile communication voice services using the Total Element Long Run Incremental Cost (TELRIC) every four years. This study recommends Pure TELRIC model to calculate MTR, with exclusions for common costs like spectrum fees, frequency charges and HSS, in line with the fundamental principle of LRIC.

To calculate MTR from 2025 to 2028, this study, based on the findings of previous studies in 2019, updates a set of parameters. Calculation logic and parameter set value are renewed by referring to benchmark countries. In addition, research team also held seminars and consultations with telecom operators on the calculation method and parameters.

Taiwan is now heading towards an all-IP network era. For voice network, enabling VoLTE interconnection and 3G sunset will be a milestone in Taiwan, we assume that UMTS network will shut down and VoLTE service will launch for interconnection between operators in 2025. In addition, as telecom operators launched 5G service in 2020, a new 5G network module is built in the MTR model for the increasing number of 5G mobile users. According to the trend that 5G Standalone (SA) technology is not ready in Taiwan and the trend of worldwide, and the Voice over New Radio (VoNR) traffic under the SA networking cannot be predicted reasonably at this stage. Therefore, the model assumes that the voice for 5G users is delivered through LTE network under NSA networking during the regulatory period from 2025 to 2028.

With the scenarios of 3G shutdown plan and VoLTE interconnection being launched in 2024, the study proposes that MTR will be set as ✄、✄、✄、✄ NTD/minute respectively from 2025 to 2028 at the average of ✄% decreasing rate every year, which are adjusted in terms of macroeconomics, tax and smoothing introduction.

In addition, we conduct the public consultation to realize the practice in Taiwan and reflect the localized parameters in model. The stakeholders tried to reflect all the cost occurred in real context. But we tried to distinguish whether the suggestion is efficient or not. The rate should be decided on the presumptions of efficient network deployment according to LRIC model. For those suggestions haven’t been accepted, we will still list the effects of them on the access charge in the report. The authority could take them as the reason for mark-up.