Regulatory accounting in the telco industry, instruments and success factors.

1. Regulatory Accounting Peter KLUNE London, 21 st November 2007

6. Regulatory framework - wireline segment Residential customers Retail level Business customers Wholesale level Leased lines M1 Access M3 National Calls M4 Intern. Calls M11 ULL Interconnection Leased lines M8 Call origination M9 Call Termination M10 Transit services M13 Terminating segments M14 Trunk segments M2 Access M5 National Calls M6 Intern. Calls M7 Minimum set of leased lines no remedies Voice services No remedies M12 Broadband Access No remedies

10. Intern. comparison of methods in use Different types of price control methods, used in EU member countries grouped per market Different types of cost bases, used in member countries grouped per market Source: Regulatory Accounting in Practice 2007, ERG Report, April 2007 Wholesale markets Retail markets Wholesale markets Retail markets

12. Reporting requirements (1/2)

13. Reporting requirements (2/2)

15. Instruments used at Telekom Austria to fulfil the various regulatory requirements FL-LRIC top down calculation USO-costing e.g. public payphones Accounting separation Retail-minus calculation for bit-stream access One integrated core model which allows several variations FAC/HCA

19. Internal and external stakeholders Regulatory accounting and reporting internal external Product management Regulatory authority Competition agency Share holders Competitors Controlling Accounting Management

24. Thank you for your time Questions? Peter KLUNE Regulatory Affairs TELEKOM AUSTRIA AG Lassallestraße 9 A-1020 Austria › E-Mail [email_address]  Phone +43 (0)59059 1 16012   Fax +43 (0)59059 91 16012   Mobile +43 (0)664 629 61 76