Phone companies told to cut ‘termination’ charges
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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