Bite (bee in Latvian) has cut its previously "privileged" interconnect tariff in order to prod the two major operators, Latvian Mobile Telephone (LMT) and Tele2 into cutting what it considers excessive charges for calls from the other networks to Bite numbers.
Fred Hrenchuk, the chief honcho of Bite Latvija, says that the 0.08 LVL interconnect tariff Bite has been charging will be cut to 0.062 LVL (what the incumbents charge each other) to remove any basis for arguing that calls to Bite "cost more". He says that LMT and Tele2 have been overcharging their own customer for call to Bite by up to 0.09 LVL per minute compared to the charge for a call to either Tele2 or LMT. Bite was granted a higher interconnect in 2005 as a third, "underdog"entrant to the market.
Tele2 has recently (consciously or not) pre-empted Bite's move in its ZZ Postpaid tariff plan, where calls to all other operators, including Bite, are charged at 0.15 LVL per minute. In othe Tele2 plans, there is still a differential of several santims between calls to LMT and Bite.
Hrenchuk explained that the two incumbents have been making money from calls to Bite in two ways -- the net amount Bite pays on interconnect clearing (more calls are made by Bite customers to the incumbents than from LMT and Tele2 to Bite) and the excessive charge for calls to Bite compared to calls to other operators. Thus an operator whose customers make 100 000 minutes of calls to Bite and take 150 000 minutes from Bite would be owed (by netting out or clearing) around 3100 LVL (at the new lower rate) from Bite. However, assuming that calls to Bite cost an average LVL 0.06 more per minute, the calling volume would also generate 6000 LVL in extra revenue compared to what calls to other operators generate.
Bite Latvija hopes cutting the interconnect charges and publicizing the tariff differentials will prod or shame the major operators into bringing tariffs for calls to Bite in line with other tariffs. A letter urging such steps has been sent to Tele2, LMT and Lattelecom.