A telecoms regulator cannot force an operator to levy unjustified charges on competitors using its network, the European Union's top court said.
A Reuters report added that the ruling is expected to bolster new entrants in the sector.
The case centered on a dispute involving Germany's dominant operator Deutsche Telekom and the charges on new entrants Arcor and others for using its network, the Reuters report said.
Germany's telecoms watchdog required its peers in 2003 to pay an additional charge to compensate Deutsche Telekom for providing the local network. Competitors were already paying a fee for using the network.
The European Court of Justice said EU telecoms rules must be interpreted as 'precluding a national regulatory authority from requiring an operator "&brkbar; to pay to the market-dominant subscriber network operator a connection charge which is additional to an interconnection charge.'
The European Commission said the ruling was good news for competition in the bloc's telecoms markets.
'The judgment has confirmed that competitors can rely directly on the EU telecoms rules against decisions of national regulators which are in conflict with EU law,' a Commission spokesman said.
The ruling would help Brussels enforce EU telecoms rules more efficiently, the Commission said.