Mobile operators fight EC's termination rate plans

Europe's biggest mobile phone operators are today launching what The Guardian calls a last-ditch effort to persuade the European Commission to postpone plans to enforce lower termination rates.

The report says the CEOs of Vodafone, Deutsche Telekom (T-Mobile), France Télécom (Orange), Telecom Italia (TIM) and Telefónica (O2) will urge the Commission's President José Manuel Barroso to defer the plans until 2015 or later rather than proceed in 2012.

Their smaller rivals, deprived of face-to-face talks with Barroso, insist that cutting the fees will benefit consumers by increasing competition and reducing consumers' bills, The Guardian writes.

They say high charges squeeze them out of the market. The smaller companies are backed by BT, which is sending a senior official to the talks, and most national telecoms regulators. BT executives say fixed-line customers subsidise mobile operators by up to 80% of the cost of each call they make to wireless numbers.

Britain's Competition Commission last month called for a 20% cut in connection charges, sending Vodafone shares down sharply. French and Italian regulators have already steeply reduced the fees.

In effect, the larger operators are going over the heads of Neelie Kroes, EU Competition Commissioner, and Viviane Reding, the Commissioner who overseas media and telecoms, in appealing directly to the Commission's President.

Smaller operators fear that Barroso will bow to intense pressure from London, Berlin, Paris and Rome. The EC is due to make its final recommendations to the EU's 27 governments tomorrow.

Last June Reding recommended that termination rates be reduced over three years from an average of €0.087 to €0.02 by May 2012 to cut consumers' bills and encourage investment in next generation, fixed-line networks.

Reding has said operators relying on termination rates as a substantial source of revenue should change their business model, not penalise consumers.

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