The Peruvian telecom regulator, OSIPTEL, has today published its decision on the value of the ‘X’ factor for the RPI-X price cap to be applied to Telefonica’s retail fixed telephony services over the 2016 to 2019 period. Frontier (Europe) advised Telefonica throughout the price cap review.
OSPITEL decided that the ‘X’ factor should be the same as the inflation rate, so long as inflation is between 2.4% and 3.4%. This means, in practice, that prices will remain frozen in cash terms over the next three years, unless inflation moves outside this range. The result is based on estimation of the Total Factor Productivity and input price growth of Telefonica and the Peruvian economy between 1995 and 2015. The report provides details on both on OSIPTEL’s estimates and Telefonica’s estimates.
Frontier Economics regularly advises private and public sector organisations in the telecommunications sector.
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