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The European Union has told mobile phone companies they should reduce the fees they charge for routing calls that originate on networks other than their own.

Officials want firms to reduce these rates, known as ‘termination’ fees, by 70 per cent to 2011.

Commissioners told the industry call termination markets in the EU need a ‘regulatory plumber’.

Operators reacted by defending the reasons behind the charges and warning customers would be hit elsewhere as firms try to recoup lost revenue.

Telecommunication commissioner Viviane Reding said: "`Call termination markets in the EU need a regulatory plumber.

"Over the next three years, I expect greater consistency and coordination to bring the costs for mobile-phone calls down by around 70 percent.”

According to analyst ING, mobile companies operating in the EU get about 15 per cent of their income from termination charges.

Richard Feasey, Vodafone’s director of public policy, said reducing these charges could see some customers paying to receive calls – a practice already used in the US but not present in Europe.

According to the Commission, mobile termination rates are nine times more than the fee for completing a call on a fixed network.

This has been allowed in the past so mobile firms could get extra cash while building up their networks.

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Mobile phone operators are facing a challenge from Eurpean Union officials over the prices they charge for routing calls that don’t originate on their networks.

Regulators are proposing that  Vodafone Group, Deutsche Telekom AG and others slash such ‘termination’ fees by 70 per cent over the next three years.

Providers reacted by saying this could lead to a US-style system, with customers paying for received calls as companies recover lost revenue.

European telecommunication commissioner Viviane Reding said: "Call termination markets in the EU need a regulatory plumber. Over the next three years, I expect greater consistency and coordination to bring the costs for mobile-phone calls down by around 70 percent.”

The EU executive arm, the European Commission, also said differences in the rates between countries should be reduced.

The European Telecommunications Network Operators’ Association reacted by saying: "A radical change of cost methodology for mobile termination rates moreover risks having a detrimental effect on a highly competitive and innovative sector."

The GSM Association, which represents more than 700 operators, echoed this sentiment, saying a Europe-wide approach to setting rates was simply not needed.

It said costs vary across the continent because of differences in population density, licence fees and labour costs.

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Pessimism surrounding the UK’s economy and the tightening of household budgets is causing consumers to avoid buying payment protection insurance in order to cover their outgoings.

An increase in the cost of living has led to 70 per cent of Brits to say they are not willing to take out payment protection insurance (PPI) in order to pay their mortgage, insurance premiums and other outgoings, according to research from the Association of British Insurers.

More than 90 per cent of Brits believe the UK’s economy is in a worse position than the same time last year, with a further 80 per cent expecting economic conditions to worsen in the coming year.  The public’s pessimism is reflected by companies, who are cutting costs, resulting in a rise in unemployment.

Despite this pessimism, and the acceptance by two thirds of people that they would not do well if made redundant, Brits refuse to seek financial support through purchase protection insurance.

Nick Kirwan, the ABI’s assistant director of health and protection insurance said:

“It is worrying that so many people are not prepared to look at taking out protection insurance, even insurance which covers redundancy given the uncertain economic outlook. It’s clear that we need to work harder to get the message across about the peace of mind and value that having the right protection insurance gives individuals and families. We recently published a consumer factsheet on protection insurance products. We hope this will encourage more people to consider protecting their most important financial assets - their income and their home.”

50 per cent of survey respondents had life insurance, while 39 per cent has no life insurance, payment protection insurance nor mortgage payment protection insurance (MPPI).

Rebecca Driver, the ABI’s director of research and chief economist said that “Given the economic outlook and the risk of rising unemployment, people need to develop strategies to protect themselves better.”

According to City Analyst Capital Economics thousands of the employed middles classes are taking on second jobs to deal with the rising cost of living. These workers include lawyers, police officers, business analysts, and IT workers taking on freelance work, selling things on eBay or working as chauffeurs. Compared to previous periods where the cost of mortgage insurance and living as a whole has risen there has been a five per cent rise in the number of people working second jobs bringing the current total to 1.15million.