Critique of the IFT’s MTR model for 2017 regulation

The IFT, the Mexican regulator, was looking to set mobile termination rates (MTRs) for 2017 using a model that had been developed some years previously.  AT&T, a new entrant to the market, was concerned that this model would not give an accurate or realistic value for the cost of termination.

Plum examined the model and its documentation, including a review of the specification used to develop the model in the past.  We identified a number of areas in which the model no longer represented the market in a robust way, including assumptions over market size, the use of LTE, and asset values.  We then compiled a paper which was submitted to the IFT alongside AT&T’s own response.