Reding sets 2012 deadline for mobile call price cuts[

Brussels firm on change to mobile fees rules
By Stanley Pignal
Financial Times, 20 February 2009

European policymakers will push through rules to cut mobile phone bills in the region despite opposition from member states and aim to have a new regulatory framework in place by April, the European Commission said on Thursday.

Interconnection fees are the latest front in a protracted battle between mobile phone operators and Brussels. EU regulations have pared back the price of overseas roaming for voice calls, and proposals to cap the price of data transfers are being discussed.

Twelve countries, including Germany, the UK and Spain, voted against plans by Viviane Reding, the European telecoms commissioner, to force operators to cut the amounts they charge each other for carrying calls across their networks.

These fees, which cost consumers about 10 euro cents (13 US cents) a minute and account for the price difference between calling a mobile phone and a corresponding call to a fixed line, bring in around one fifth of total revenues for large operators such as Vodafone, Telefónica and Deutsche Telekom.

Fierce lobbying by mobile operators meant only five countries supported the Commission’s proposal to force them to reduce those charges by over two-thirds, to between 1.5 and 3 cents a minute, by early 2012. Ten countries abstained.

But a spokesman for Ms Reding said the plans had “wide support” in the EU and would be adopted by the Commission in early April.

Ms Reding is pushing for the charges to reflect the cost to the operator, arguing that higher fees act as a barrier to competition and a subsidy from small operators to large ones.

The industry argues that the connection charges are necessary to its business model, and that artificially low charges could mean subscribers would end up paying to receive calls to their mobiles, as in the US.

The Commission can ignore the vote by member states, held as part of a regular consultative exercise, as it looks to formulate its own recommendation to guide telecom regulators.

Industry observers, however, said the result was likely to reinvigorate the operators’ campaign for a softer implementation of the proposal, or a delay of one or more years before the price caps are set in.

Etno, which represents mainly big phone operators, said the proposal threatened its members’ cash flows when many were making large investments in “next generation networks”. “The outcome of [the] vote ... sends a signal that significant changes are needed,” its director said. In contrast, smaller operators welcomed the Commission’s apparent resolve.

Copyright The Financial Times Limited 2009
EurActiv reports that despite opposition from a majority of EU Member States, Information Society Commissioner Viviane Reding is set to move forward with plans to significantly cut the revenues of mobile telecoms operators by February 2012,

ESO: Background information: Vodafone slams curb on rates http://www.europeansources.info/record/vodafone-slams-curb-on-rates/

Moneyterms: Termination rates http://moneyterms.co.uk/termination-rates/

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