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HomeReview of approaches to estimate a reasonable rate of return for investments in telecoms networks in regulatory proceedings and options for EU harmonization
Final report
Metadatos de publicación
National Regulatory Authorities (NRAs) for electronic communications in the EU may set maximum wholesale price caps for access to the network of operators with Significant Market Power (SMP) when certain market conditions exist. In setting these caps, the Regulatory Framework for telecommunications indicates that NRAs should allow SMP operators a reasonable rate of return on their investments. NRAs typically estimate the weighted average cost of capital (WACC) of the operator to determine this reasonable return. However NRAs often use different methodologies, so that the resulting WACCs differ for reasons other than market fundamentals. These differences may distort market participants' investment decisions and ultimately the digital single market. In this report, we develop guidelines for a common WACC methodology in the EU's telecoms sector. We highlight areas where we consider it would be appropriate to set single EU-wide values for WACC parameters. Where we conclude this is not appropriate, we recommend a common EU-wide methodology to estimate a parameter value specific to a Member State. Our report assesses the reasonable return on investments for ‘legacy’ copper networks and Next Generation Access (NGA) networks.
- Publicado:
- Tema: industria de telecomunicaciones , inversión , política de inversión , política de telecomunicación , red de transmisión de datos , reglamentación de las telecomunicaciones , techo arancelario , tecnología de la información
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| ISSN | ISBN 978-92-79-58520-3 | DOI 10.2759/84741 | Número de catálogo KK-04-16-408-EN-N |
- Released on EU publications website:
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