Application of the Retail-Minus on price regulation in wholesale market of electronic communications

Abstract

The paper deals with the role of Retail-Minus method in control of the wholesale prices in the broadband market in the Republic of Serbia. In telecom market of Republic of Serbia the dominant method arranged is cost-based pricing. However, years of experience of other countries has shown that the Retail-Minus method is precisely useful test for determining primarily the extent to which these prices should change and that this method combined with the cost based model can be very useful tool for price control by the regulator. The ultimate goal of this control is to encourage healthy competition between operators in this monopolized wholesale market, or a market where there is an operator with significant market power (SMP operator).