Brussels, 27/03/2002 (Agence Europe) - On Wednesday, the European Commission decided to send Dutch incumbent telecommunications operator Koninklijke KPN NV a statement of objections alleging that KPN, through its subsidiaries KPN Mobile (mobile traffic) and KPN Telecom (fixed traffic), has violated the competition rules of the EC Treaty. Specifically, the Commission suspects KPN of abusing its dominant position regarding the termination of telephone calls on the KPN mobile network through discriminatory or otherwise unfair behaviour. In a press release, the Commission explains that "despite a decrease of around 10% over 2001, average peak time rates charged by EU mobile operators for terminating telephone calls on their respective networks remain approximately ten times higher than the average charge for fixed to fixed interconnection". Termination rates can account for 75% of the price paid by a user for a phone call from a landline to a mobile phone.
In its statement of objections, the Commission notes that KPN abuses its dominant position through discrimination by KPN Mobile on the terms for direct termination in favour of KPN Telecom; unfair pricing practices amounting to a margin squeeze between KPN Mobile's wholesale terminating services offered to other network operators and the retail prices of KPN Mobile/Telecom for certain mobile/fixed services offered to business customers in the Netherlands; and constructive refusal by KPN Mobile to provide direct interconnection for call termination on its network.
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The case stems from a complaint by MCI WorldCom, a US-based fixed telecoms network operator about termination charges in three EU countries, namely the Netherlands, Sweden and Germany, but the complaint against Germany was withdrawn after the German operators reduced their termination rates by 50% and in Sweden "the national competition authority is dealing with the issue", explained the Commission. The investigation of KPN is the first step in an offensive by DG Competition on termination charges. A Commission spokesperson explained that at the end of April or the beginning of May, the Commission would be publishing a Communication recommending that operators cut charges for calls from landlines to mobile phones.