EU bid to slash mobile phone bills fails

 

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By Reuters

Posted on 18 Feb 2009 at 16:57

European Commission draft guidelines to slash the cost of mobile phone call routing fees have failed to win a clear endorsement from EU governments.

EU Telecoms Commissioner Viviane Reding was attempting to cut wholesale call termination fees by up to 70% to spur competition and give customers a better deal.

An operator will pay a termination fee, currently around 9 euro cents (8p) a minute, for using another operator's network to complete a call.

The fees represent up to 20% of revenues for large operators with big networks and are a big cost for small networks trying to compete. The guidelines will bring fees down to 1.5 to 3 cents a minute.

The EU's communications committee (Cocom) of national government officials and the Commission met to give a non-binding opinion, and most countries either abstained or voted against some aspects.

Germany and Spain voted to scrap the guidelines altogether. Their biggest domestic operators say the measure will leave less money to invest in their networks.

The Commission says there is enough support for the guidelines to be fully phased in by February 2012 but about eight countries want other ways to cut fees such as "benchmarking" or tracking average rates in other EU states.

"The Commission welcomes the positive signal at the vote today and there is support for the objective to lower by February 2012 mobile termination rates to the level of the cost of an efficient operator," Reding's spokesman claims.

"The Commission will now carefully analyse the view of member states who expressed the need for more flexibility," the spokesman adds.

An official close to one of the big Continental European operators says Reding will be obliged to review the guidelines.

"Without the consent of member states it cannot adopt the text. Will states be ready to apply the recommendation if their governments have voted against it?" the official said on condition of anonymity.

The European Regulators Group of national telecoms supervisors claims th termination rates are already falling and will come down by 40% over the next three years anyway.