Local Eesti Telefon calls to go up by a third in April

TALLINN - Estonia's largest telecommunication operator Eesti Telefon recently announced its local call prices will grow by more than a third beginning in April. Government officials are investigating whether the price growth is warranted.

Beginning April 1 the price of local calls will grow 0.24 kroons ($0.02) to 0.34 kroons 7 a.m. to 7 p.m.. Rates for long distance calls within Estonia will drop from 0.68 kroons during the day to 0.34 kroons, the company said.

The company said the price changes are part of its policy of price unification announced last December. But most subscribers were surprised by the local call rate hike.

The daily newspaper Postimees quoted an unnamed analyst as saying that the new prices will bring Eesti Telefon 10 million to 15 million kroons of additional revenue by the end of this year.

Prices for calling other fixed networks owned by Tele2 and Uninet will also increase.

Also beginning in April, daytime calling from the Eesti Telefon fixed-line network to the Tele2 network will cost 0.5 kroons and to Uninet 0.57 kroons.

Eesti Telefon's competitors have appealed to communications regulators, arguing the new prices will doom free competition. Markus Nisula, the president of Uninet Ltd., considers the new prices a direct danger for free competition.

"If it is twice as expensive to call our clients from the Eesti Telefon network it will be a deadly influence on competition," he told ETA.

Uninet and Tele2 announced new prices four days after ET's decision.

Uninet's single price for domestic calls will be 31 sents in standard time and 28 sents in cheap time.

Tele2 will lower the price of domestic long distance calls to 31 sents per minute in standard time and 30 sents per minite in cheap time.

"Tele2 has entered the Estonian market with its telephone services with the aim of providing a high-quality service at the best prices and we are not going to back away from our promises to clients," Tele2 Board Chairman Ivar Lukk said.

In the near future, Tele2 will start providing also local-call service.

"We will come out with our price list as soon as the interconnection tariffs endorsed by Parliament find their way into an interconnection agreement between Tele2 and Eesti Telefon. We wish to have competition despite Eesti Telefon's attempts to obstruct it in every way," Lukk said.

Valdo Kalm, the president of Eesti Telefon, said the price changes were a logical step in the development of Estonia's telecommunications market.

"Administrative borders between counties often create an artificial price gap, because today it is more expensive to call a friend living 10 kilometers from you in a neighboring county than somebody living 50 kilometers away in your county," said Kalm.

Transportation and Communications Ministry spokesman Aap Tanav said the communications board is analyzing additional information from Eesti Telefon to determine if the rate increase is unwarranted.