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Retail price regulation in Jordan
The Telecommunications market in Jordan is distinguished by a variety of services provided. And in spite of Jordan’s new experience in price regulation for different services provided by licensees, it’s considered one of the most successful experiences at the regional and international levels.
Telecommunications Regulatory Commission (TRC) regulates services’ prices in the case of a single provider for the service (monopoly), but where competition exists, prices are left to be determined by market forces, Price regulation in Jordan aims at providing these services with high quality and at reasonable costs by following competition rules and putting standards and related formulas to determine services prices provided by Licensees .
The following is a description for TRC’s experience to regulate retail prices for different services:
PSTN Service (JT):
Jordan Telecom (JT) has an exclusive right to operate and provide the PSTN services, therefore, TRC used the following method to regulate it’s prices:
1. Price Cap method:
This method is in line with a Council of Ministers decree that determines the main guidelines that govern the process of setting the prices of PSTN services during the exclusivity period of the company, which last till the end of 2004, and it was extended unstill the issuance of new instructions for retail price regulations by TRC.
According to the decree, a basket of service tariffs, which includes connection fees, monthly rental, local call fees, national call fees and international call fees, are subject to price cap regulation. JT has the right to change the service prices according to thie following formula: (CPI-X)%, where CPI is the consumer price index of the preceding year and X is an additional moderating factor which is determined to be zero for the first two years of the exclusivity period and 3 % for the remaining years of exclusivity period. There’s one limitation based on where it cannot increase the price of any of the basket elements by more than 20 % per year unless such increase has received prior written approval from the Council of Ministers.
2. The pricing of services other than those included in the basket is subject to the regulations issued by the TRC.
Mobile Services:
Pricing of Mobile services is subject to the market mechanism due to existence of competition. TRC doesn't intervene to determine prices under competition situation, but it has the right to regulate the prices if there are anti-competitive practices.
Internet prices:
Pricing of Internet services is subject to market mechanism, and TRC has the right to regulate its prices
Telephone Prepaid Calling Cards prices:
Pricing of Telephone Prepaid Calling Cards services is subject to market mechanism, and TRC has the right to regulate its prices.
PSTN Service tariffs (JTC): (1/jan/ 2007)
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Item
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1/1/2007
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1/4/2006
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1/4/2004
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1/3/2003
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1/3/2002
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1/2/2001
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1/1/2000
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Local call (Fills/minute)
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Day
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15
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15
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14
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12
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10
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10
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10
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Night
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10
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10
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9
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8
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10
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10
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10
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National call(Fills/minute)
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Day
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24.5
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24.5
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27
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33
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41.5
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44
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49
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Night
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17
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17
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18
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23
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29.05
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30.8
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34.3
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Installation fees (JD)
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Home
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35.88
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35.88
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35.88
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44.8
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56
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80
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100
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Business
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71.76
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71.76
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71.76
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89.6
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112
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160
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200
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Monthly fees (JD/ year)
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Home
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56.76
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56.76
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53
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50.76
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46.2
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40.2
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33.6
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Business
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128.4
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128.4
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120
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116.16
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105.6
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96
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86.4
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Day tariff : from 7:00 am till 8:00 PM for local and national calls, and from 8:00 am till 10:00 PM for international calls
Night tariff: from 8:00 pm till 7:00 AM for local and national calls, and from 10:00 pm till 8:00 AM for international calls. And night rate also applicable on all local, national and international that have made through Fridays and official holiday
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