European Commission adopted a recommendation on 7 May on the regulatory treatment of fixed and mobile termination rates in the European Union. According to EU Telecoms Commissioner, Viviane Reding, ''this recommendation addresses the serious inconsistency between national approaches concerning the regulation of termination rates - the wholesale fees which phone operators charge each other for connecting calls to subscribers on their networks. And deals with the indirect subsidy which fixed operators and smaller mobile operators currently have to pay to mobile operators with significant market power''.
The Recommendation sets out, that national regulatory authorities (NRAs) should fix the national termination rates (fixed-mobile) based on the costs incurred by an efficient operator for ''terminating'' calls on its network. A methodology is established for calculating the rate, allowing operators to recover all relevant costs incurred in the provision of call termination services to third parties. NRAs must take "the utmost account" of the recommendation, ensuring that termination rates are applied at a symmetric and cost-efficient level by the end of 2012. However, there is also provision, in exceptional circumstances, for national regulators to be able to use alternative approaches up to 01 July 2014, if these methods lead to a result which is consistent with the recommendation and with a competitive market.
At the press conference presenting the recommendation, Competition Commissioner, Neelie Kroes, said that ''today's recommendation on termination rates is about customer welfare - it will benefit both business and household phone users by requiring termination rates to be based on costs (...) it is obvious that fair prices for fixed and mobile phone calls are a basic economic need for all Europeans, and a more competitive market is needed to deliver them''.
Further information:
- Telecoms: Commission acts on termination rates to boost competition http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/710&format=HTML&aged=0&language=EN&guiLanguage=en
- Telecoms: Commission acts on termination rates to boost competition - Frequently Asked Questions http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/09/222&format=HTML&aged=0&language=EN&guiLanguage=en
