By June 16, 2008

Report says EU may okay mobile charges for accepting calls

image European mobile phone users may have to pay US-style charges for receiving calls after Viviane Reding, the EU telecoms commissioner, said she was prepared to accept the industry changing its longstanding business model.

In an interview with the Financial Times, she signalled she was poised to propose rules to cut the cost for Europeans when sending text messages while abroad. She is considering taking similar steps to cut the cost of web surfing on mobiles while overseas.

image But Ms Reding is alarming mobile operators such as Vodafone and Telefónica most with her efforts to seek steep cuts in the lucrative wholesale charges telecoms companies impose on each other for connecting calls to their networks.

Some operators are privately warning that one consequence of her efforts could be an increase in mobile charges for customers.

One operator said Ms Reding’s moves could result in the introduction of the principle that Europeans pay for receiving calls – as well as making them – which is the norm in the US and some Asian countries, including China and Singapore.

Asked whether she would like to see the introduction of the principle that Europeans pay for receiving calls, Ms Reding said: ”Why not? The whole market is developing, so we should not stay on the rules that have been in place 10 years . . . I think the business models are not for the European commissioner to decide. Business models are for the operators to decide.”

The US practice of paying for receiving calls has resulted in low mobile termination rates. These are the wholesale charges that wireless phone operators impose on each other and fixed-line companies for connecting calls to their networks.

Some academics estimate that US consumers enjoy lower mobile charges compared with Europeans. However, the absence in Europe of the principle that consumers pay for receiving calls is regarded as a key factor in why many EU countries have higher mobile ownership levels than the US.

Ms Reding attacked European mobile termination rates as ”guaranteed money” that created ”real distortion” in the EU single market.

She will publish proposals this month that will encourage national telecoms regulators to cut termination rates across the EU.

The average EU mobile termination rate is 8 euro cents a minute, although the rates vary markedly between member states, and Ms Reding wants to see them cut to between 1 euro cent and 2 euro cents by 2012.

via Financial Times

Posted in: Phones

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