EU says Britain's wholesale tariffs 'too high'

The European Commission warned Britain that it was setting wholesale tariffs too high and risked blocking a trend toward lower consumer prices, an Associated Press report said.

The Associated Press report, quoting officials, said the EU executive was asking the British regulator Ofcom to reconsider its valuations, telling it to exclude the 'inflated' costs of buying licenses for 3G mobile phones.

Current plans to limit the charges mobile operators pay each other when they transfer a call from one network to another are likely to hinder an attempt to lower prices, it said.

The EU criticisms center on the wholesale tariffs the five British mobile operators, Telefonica unit O2, France Telecom subsidiary Orange, T-Mobile International, Vodafone Group and Hutchinson 3G, charge for terminating calls between customers on different networks, the Associated Press report said.

Ofcom in September put forward plans for 'cost-orientated tariffs' that would reduce mobile termination rates to target prices over three years, starting April 2007.

But EU officials claim Ofcom's planned tariffs are 'higher than necessary' because it counted in 3G spectrum costs, the report said.

'The Commission believes that such costs should not be calculated on the basis of prices paid during the spectrum auctions, which are in today's context inflated,' said EU telecoms chief Viviane Reding.