EU pitches 70% cut in mobile call handling charges

European mobile operators face a 70% cut in the fees they charge each other for passing on calls from competing networks under draft guidelines published by the European Commission, a Dow Jones report said.

The report said the development led to sharp criticism from the industry.

European Union telecoms commissioner Viviane Reding argues that so-called termination fees, which account for around 20% of operators' revenue, don't reflect the cost of providing the service and are nine times higher than equivalent fixed-line charges, the Dow Jones report said.

Mobile call termination rates are currently around €.08 to €.09 euros a minute.

But the commission's latest proposals faced strong opposition from the industry and some national telecommunications regulators, who may seek to block it, the report said.

The commission's plans are 'too drastic,' said Hamid Akhavan, chief executive officer of Deutsche Telekom's T-Mobile wireless unit, quoted by Dow Jones. 'That is a level that is significantly below what we expected,' he said.

Richard Feasey, director of public policy at Vodafone Group, said the commission's proposal fundamentally changes whe way mobile operators cover the cost of operating a network in Europe.

Operators' revenue is already under pressure from previous cuts to roaming call prices and increased competition, just as they face possible further regulation on text and data charges.

Industry body GSM Association, joining the chorus of criticism, said there's little need to regulate an industry in which prices are already falling year on year, the Dow Jones report further said.