Vodafone share price hit by EU call termination ruling


Statements from the EU aimed at driving down the cost of mobile calls have cut Vodafone’s share price by nearly 5%.
The EU Telecoms Commissioner, Viviane Reding, is looking for national telecoms regulators to cut mobile termination fees by up to 70% in a move that would reduce European mobile revenues by €2 billion.
However, while the top-line statement of a 70% cut might look savage, operators seemingly have room to maneuver given that this EU ruling is nothing more than guidance for regulators in each EU country.
In EU language, the guidance is a recommendation that national regulators are obliged to take "the utmost account” of - essentially meaning that the rules are not binding.
In an attempt to clarify its thinking, the EU said termination rates at a national level should be based only on the real costs an efficient operator incurs to establish the connection.
The EU has told national regulators to apply these new rates by the end of 2012, but those regulators with limited resources can adopt a different approach for a limited time.
Neelie Kroes, EU Commissioner for Competition, has also become involved with pushing forward these new rules by congratulating those countries that already have moved closer to the commission's recommendation - including Sweden, Finland, France, Italy and Romania.
But she slammed Bulgaria, Spain and Germany for being far from compliant.
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The Times and Total Telecom