EU framework mobile termination tariffs

Brussels back to attack subsidies to mobile operators

It is a recommendation to the regulators but it should be taken into account “maximum account”. The European Commission today launched measures to determine the reference rates that could lead to savings of 2 billion euros between 2009 and 2012 for consumers and businesses. The main target is fixed-mobile tariffs, classified as an indirect subsidization by mobile operators.

The European executive specifically states “that termination charges at national level should only be based on the actual costs incurred by an efficient operator to establish the connection” and passes this guidance on to regulators, who must apply them in the various Member States. The objective is to start applying the reductions now and extend these measures until 2012, when termination rates should be between 1.5 and 3 cents per minute.

Termination rates correspond to wholesale rates that operators charge each other for forwarding calls to another network, costs that are then reflected in users’ bills.

According to an analysis by the European executive, there is a great diversity of regulatory practices and termination values ​​practiced in the EU, which distorts competition.

The lowest rates are practiced in Cyprus, at 2 cents per minute, and the highest in Bulgaria, at 15 cents per minute. It is in the connections from fixed networks to mobile networks that the EC also focuses its attention since they cost an average of 8.55 cents per minute in the EU, which are normally 10 times higher than when terminating calls on the fixed network.

According to the EC, the French regulator, ARCEP, estimates that the rates for efficient mobile termination should be between 1 and 2 cents per minute.

The European executive does not set the target in these values ​​but wants the tariffs to be reduced by 1.5 to 3 cents in four years, defining 2012 as the date when these prices must be harmonized across Europe. Price guidance is based on “costs for an efficient operator and apply at the same level to all operators”, says the EC, but some exceptions are allowed, for a limited period of time.

The European Commission estimates point to a potential reduction in cash flow / profits for the mobile industry by 4 billion euros over the next three years as this policy is implemented by regulators. According to calculations released in a working document, smaller mobile operators, which have a higher outbound traffic than inbound traffic, will be able to pay less to their larger competitors, while fixed operators can earn € 2 billion in additional revenue. with what they save on mobile termination rates.

To these values ​​are added the reductions in the bills of families and companies that can reach 2 billion euros.

Portugal improves average in fixed-mobileIn the analysis carried out in October last year, Portugal showed an improved situation in termination rates, already standing below the average after in 2007 being among the countries with the highest values. The average value of termination rates practiced by national operators for calls terminated on mobile networks was 7.72 cents on the date, when in the previous year it was 11 cents.

EU framework mobile termination tariffs

In the fixed termination rates, the assessment for termination of the incumbent networks, in the case of Portugal Telecom, placed Portugal also below average, with a cost of 0.54 cents which was nevertheless reduced compared to 2007, when it was 0 , 56 cents.

EU framework fixed termination tariffs

Fatima Hunter