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Carriers Under Siege From EC

Ray Le Maistre
LR Mobile News Analysis
Ray Le Maistre, Editor-in-Chief
6/27/2008

It can't be long before senior executives at Europe's mobile operators are sticking pins into effigies of Viviane Reding, the European Union's telecom commissioner.

Having already pinned back the operators' voice roaming fees, she's now targeting their mobile termination and data service rates, too, in a dual assault on mobile tariffs that could dent the carriers' top and bottom lines. (See EC Tackles Data Tariffs and EC Tackles Termination Rates.)

Yesterday, the European Commission launched a public consultation on the future regulation of "voice call termination rates" -- the wholesale prices (set by national regulators) that operators charge each other to connect cross-border calls -- within the European Union's 27 states.

The EC believes the wide variety of rates within the EU, and the fact that mobile termination rates are far higher than fixed line termination rates, "distorts competition between operators from different countries and between fixed line and mobile phone operators."

And Reding believes that an overhaul of mobile termination fees would help slash mobile subscribers' phone bills. "Call termination markets in the EU need a regulatory plumber." We hope she's got the appropriate van, toolset, and a penchant for 10 sugars in her tea, then. "Over the next three years, I expect greater consistency and coordination to bring the costs for mobile phone calls down by around 70 per cent from the current level."

You could say that's Reding's broadband pipe dream.

But the potential hurt for Europe's mobile operators doesn't stop there: Reding's not happy with the way they price their mobile data services, either, and has been haranguing the carriers to cut their data tariffs for months. (See Reding Back on Attack and Reding Guns for Data Roaming Cuts.)

Now she's nearly run out of patience. In a missive issued Friday, Reding notes: "Use of data roaming services remains limited as consumers are discouraged by extremely high charges when compared to national prices, as well as a lack of transparency related to the pricing by volume of data (Megabytes) used... Operators should therefore better inform consumers and business people when they are abroad, both about their retail price plans for data roaming and the ratio of data volumes to price, preferably on a real-time basis. For one last time, I call on mobile operators to react to my request of February to voluntarily but clearly bring down mobile roaming charges for text messages and other data by 1 July.”

Not surprisingly, Reding's latest moves have prompted a defensive response from the carrier community...

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