Deutsche Telekom: Cuts to mobile termination rates are a 'disaster'

The German telecoms regulator, BNA, has told mobile operators they must lower their mobile termination rates (MTR) effective immediately.

This move has triggered uproar from Deutsche Telekom (DT), O2 Germany and E-Plus. Responding to the sudden announcement, a DT spokesman called it a disastrous decision, and O2 said it would threaten the forthcoming deployment of LTE.

However, while some within the industry talked of MTRs being reduced by 50 or 60 per cent, it would appear that negotiations between German operators, MVNOs, the EC and the BNA have yet to reach a final conclusion. It would seem likely that the lower rates might not be finally agreed and announced until March 31st, 2011.

The catch here is that the new rates will be applied retrospectively and back-dated to December 1st, 2010. If this didn't cause enough anger, the BNA has also confirmed that these new rates would stay in force until November 30th, 2012 when a new regime would be imposed.

Commenting on the new rates, Matthias Kurth, president of the BNA, acknowledged that the imposed cuts are "steep" but he remained confident that mobile operators would still find it "possible to make profits."

O2 Germany called the cut to MTRs unnecessary, claiming that the development of new tariffs in recent years indicated the mobile market was functioning well. The company said the decision also hindered the broadband strategy of the Federal Government due to operators having less investment resources. "This regulatory decision does not help further innovation and harms the German consumer."

Guido Heitmann of E-Plus said, "While we agree that the MTR fees have to decrease, the imposed cuts are so significant that it will make planning much more difficult for all market participants."

For more:
- see this TelecomTV article
- see this Teltarif article (German lang)

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