EU: mobile phone companies should cut rates
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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