EU acts to bring down mobile phone charges

BRUSSELS, May 7 (Xinhua) -- European mobile phone users would save at least
two billion euros (2.67 billion U.S. dollars) over the next four years if
operators cut their wholesale charges under a European Commission guidance
adopted on Thursday.

The guidance indicated specifically that termination rates at national
level should be based only on the real costs that an efficient operator incurs
to establish the connection.

Termination rates are the wholesale fees charged by operators to connect
the call from another operator's network which are part of everyone's phone
bill.

Mobile termination rates varied widely in the European Union (EU) in 2008
from 2 euro cents per minute in Cyprus to 15 euro cents per minute in Bulgaria,
averaging at 8.55 euro cents per minute across the EU, and the rates are also
typically 10 times higher than fixed termination rates.

Higher mobile termination rates make it harder for fixed and small mobile
operators to compete with large mobile operators.

The commission suggested that appropriate termination rates should fall
between 1.5 euro cents to 3 euro cents per minute by the end of 2012.

It warned these divergences, and differing regulatory approaches, undermine
the EU single market and Europe's competitiveness.

"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 EU Telecoms Commissioner Viviane Reding.

The commission estimated that eliminating price distortions between phone
operators across the EU will lower consumer prices for voice calls within and
between member states, saving business and household customers at least two
billion euros in 2009-2012, and help investment and innovation in the entire
telecoms sector.

"Bringing down termination rates to an efficient level will increase
competition to the benefit of European consumers," said EU Competition
Commissioner Neelie Kroes.

"Only a rigorous and harmonized approach to regulation will ensure that the
existing distortions of competition are removed in the whole EU and that
innovative new products combining fixed and mobile calls will emerge," she
added.