Telcos insist EU action will not help consumers

Five European mobile telephone operators released a study aimed at proving that EU plans to force them to cut certain mobile phone costs will not reduce prices for consumers, an AFP report said.

In late June, EU Telecommunications Commissioner Viviane Reding promised to cut by 70% over the next three years 'mobile termination rates' charged by the operator of a person receiving a call, to the one who made it, the AFP report said.

The costs, which vary in the EU from €0.02 to €0.19 per minute for a call with a mobile telephone, are around nine times those charged from a fixed phone, and Brussels believes that lowering them will benefit consumers, the report said.

The study -- for Deutsche Telekom, Orange, Telecom Italia, Telefonica and Vodafone -- found that cutting these costs 'would not necessarily lead to lower overall costs for owning and using a phone'.

It could also 'lead to lower penetration rates and consumer welfare', with penetration dropping by around 9% in zones where mobile termination rates (MTRs) could be cut.

The study noted that customers in the US -- where MTRs are lower than in Europe -- are paying an average €11.73 euros (US$16.52) more on their mobile phone bill each month, even though call costs there are lower.

Reding is due to finalise her cost-cutting plans by the end of the year, and the study is yet another sign that Europe's telecoms industry plans to do its best to water them down, the AFP report further said.

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