EC looks to cut mobile phone charges

30 June 2008 / by Joy Tibbs
The European Commission (EC) has unveiled its plan to reduce the fees mobile phone networks charge for cross-network calls, known as 'termination' rates. However, mobile companies are warning that such a move could see the end of the free handset era.

The said yesterday that, although they had already started to fall, termination rates were still nine times as high as fixed-line charges, and that there are major discrepancies between different services across Europe. It is hoping to introduce new rules which would lead to a 70 per cent reduction in charges.

Telecoms commissioner, Viviane Reding, said: "Call termination markets in the EU need a regulatory plumber. Over the next three years, I expect greater consistency and coordination to bring the costs for mobile phone calls down by around 70 per cent from the current level."

But mobile phone providers, who have until September 3 to respond to the proposals, have reacted relatively negatively. It appears that many companies would lose around 20 per cent of revenue should the proposals be enforced.

This could mean that when consumers sign up for a new mobile phone contract, they will no longer receive a free handset. Pay-as-you-go customers could also potentially see a significant increase in call prices.

Meanwhile, Ofcom has given holidaymakers some guidelines when it comes to using mobile phones abroad, which can prove costly. The regulator warned operators to reduce texting and downloading costs for travelling customers in January. Despite this, some have continued to defy its cautions.

Therefore, Ofcom is encouraging phone users to enable their phones for use abroad and to check prices before travelling. It suggests that consumers compare mobile phone deals and reminds people that the Eurotariff, which has helped to reduce call costs does not apply to texting and data downloads.

Chief executive, Ed Richards, said: “Ofcom is encouraging industry to bring down the price of texts and downloading data when consumers are abroad. This advice will help to ensure that consumers can get the best value for money when keeping in touch and downloading data whilst abroad, and avoid unexpectedly high bills on their return.”

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