Europe to slash mobile costs by €2bn

The European Commission is seeking to cut the cost of mobile phone calls yet further by imposing new caps on termination rates – the wholesale fees operators charge each other to connect a call from another network.

Mobile termination rates vary widely in the EU from €0.02 per minute in Cyprus to €0.15 per minute in Bulgaria, and average around €0.085 per minute, or about ten times higher than fixed termination rates.

The EC’s recommendation would bring termination rates down to approximately €0.015 – €0.03 per minute by the end of 2012.

Reducing these charges would lower consumer prices to the tune of €2bn between 2009 and 2012, the authority said.

“Despite efforts by some national regulators to bring termination rates closer to their real costs, they remain very disparate across the EU, with large gaps between fixed and mobile termination rates. This is not in line with the increasing convergence between fixed and mobile telephony and can lead to serious distortions of competition between Member States and operators,” said Viviane Reding, EU telecoms commissioner. “The Commission decided to intervene today against these distortions of competition in the Single Market, which deter investment into upgrading fixed networks to fibre and for which in the end consumers are paying the price.”

The EC’s guidance is in the form of a “Recommendation” that national regulators are obliged to take “the utmost account” of, and should apply by the end of 2012.