Germany Cuts Termination Rates

Federal Network Agency lowers mobile network termination fees by about 10%

November 30, 2007

2 Min Read

BERLIN -- In four new determinations announced today, the Federal Network Agency has approved the new termination rates of the German mobile network operators TMobile Deutschland GmbH, Vodafone D2 GmbH, E-Plus Mobilfunk GmbH & Co KG and O2 (Germany) GmbH & Co OHG which come into effect on 1 December 2007. The termination rates, which are paid to mobile operators by other network operators for terminating calls in their mobile networks, have now been set at 7.92 cents/minute for the two D networks and 8.8 cents/minute for the two E-networks. The new rates are hence just under 10 per cent and more than 11 per cent lower those hitherto payable to T-Mobile and Vodafone D2 and for E-Plus and O2 respectively, viz. 8.78 and 9.94 cents/minute.

Whereas during the first approval procedure for these fees last year the Federal Network Agency had to rely solely on the outcome of an international tariff comparison because none of the four operators had presented meaningful cost statements, it was now possible to derive the newly approved rates from the cost statements submitted or to use these statements to calculate the rates.

"We are pleased that at least one network operator has taken our criticisms regarding the cost statements presented to us last year to heart and has improved his cost documentation for this year's approval procedure to such an extent that we have been able to use it to derive the efficient cost of a terminating minute for the first time. This in turn permitted us to derive by means of a national comparison and subsequently approve the rates of the other three mobile operators whose cost documentation was again not deemed a sound basis for decision. In particular, we were now in a better position to map the specific costs of the German mobile operators as regards, for example, network, staff and licensing costs, frequency facilities, network topology, geographical conditions and usage behaviour, than would have been the case with an international tariff comparison. Indeed, the four mobile operators had repeatedly stressed the comparability of foreign tariffs and those applicable under German conditions which calls for a differentiated evaluation and had consequently to some extent criticised last year's rates approval as having been based on an international tariff comparison. Such objections cannot be made about the new rates. With this important step we have also achieved greater legal and planning security for all concerned. The new determinations confirm that former rate decreases were justified and can be underpinned by sound calculations. I would therefore like to ask the companies to check our decisions and underlying methodology thoroughly and then to withdraw pending legal disputes and lawsuits", said Matthias Kurth, President of the Federal Network Agency.

Vodafone D2

E-Plus Mobilfunk GmbH

Telefónica O2 Germany GmbH & Co. OHG

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