EU releases further plans to bring call charges into line

EU telecoms chief Viviane Reding has said that she expects the price of mobile phone calls to decrease by 70 per cent in the next three years, provided member states implement a draft commission plan to harmonise charges across Europe.

She was speaking after the EU opened a public consultation on the commission’s draft recommendation on “termination rates”, which are costs charged by companies to each other when a customer makes a call.

At the moment, when a customer from one network phones someone on another one, the network receiving the call charges the one making it. These charges are then passed on to the consumer.

The commission says that termination rates not only vary greatly between member states – from €0.02 per minute in Cyprus to €0.18 per minute in Bulgaria – but also between fixed line and mobile operators.

“Call termination markets in the EU need a regulatory plumber,” said Reding. “Over the next three years I expect greater consistency and coordination to bring the costs for mobile phone calls down by around 70 per cent from the current level.”

Under the framework directive on EU telecoms rules, the commission is able to harmonise laws if it promotes competition and benefits consumers.

In the draft recommendation on termination rates, the EU executive is advising telephone operators across the 27 member states to set “symmetric” termination rates based on the costs incurred by an “efficient operator”.

Competition commissioner Neelie Kroes has urged member states to implement the rules as soon as possible, saying, “Truly cost-oriented termination rates will increase competition to the benefit of consumers. Consumers should expect to pay lower retail prices as a result.

“In view of these benefits a timely implementation of this recommendation is essential.”

Monique Goyens of the European consumers’ organisation, BEUC, welcomed the move. “Consumers have embraced mobile phone technology, increasing demand and contributing to the success of this industry," she said.

“Harmonising mobile termination rates across Europe could significantly decrease prices for consumers.”

However, European Telecommunications Network Operators' Association ETNO says it “does not see a justification for such a radical proposal considering that consumers are already benefiting from consistently reducing mobile end-user prices (by 10 per cent a year)”.

“Mobile termination rates are also continuing to go down (by 40 per cent over the past 4 years) under the current rules as operators become more efficient.”

The public consultation closes in September and the commission intends to release the final text of the recommendation in October.

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