Brussels, 26/06/2008 (Agence Europe) - On 26 June, the European Commission announced that it had opened a public consultation exercise on the methodology it proposes for calculating “voice call termination rates”. It is of the opinion that the levels and differences in these rates are excessive, and work to the detriment of consumers and competition. Mobile Termination Rates (MTR) are charged by a network operator for connection to his network. In other words, when a consumer receives a phone call, his/her telecommunications company requires payment by the minute from the operator of the network from where the call came. This allows the operator to secure a return on the use of his network for calls received, which cannot be billed to customers. The Commission has been concerned for a number of years about high MTR, and the great disparities from one member state to another (between €0.02 per minute in Cyprus to €0.18 in Bulgaria). The European average is somewhere around €0.09, a 50% reduction from 2000 levels, but the Commission says that this is still too high. Applying the principle that MTR should equate to “costs plus a reasonable profit margin”, says a Commission expert, there should be a further fall in these rates. A 70% reduction over the next eight to ten years was not out of the question, he said.
The Commission, after assessing over 770 proposals by national regulators over the past 5 years, has developed a formula for calculating “costs plus a reasonable profit margin”. This formula is the subject of the consultation exercise which was announced on Thursday and which will be open until 3 September. Thereafter, the Commission hopes to adopt the recommendation before the end of the year, so that it can come into effect before the end of 2011. National regulators will then be required to “take the utmost account” of the methodology set out for calculating MTR ceilings - this means that they will only be able to avoid using this methodology if they can give “very valid reasons”, in the words of an expert close to the matter. The Commission's public consultation document is available at: http: //ec.europa.eu/information_society/policy/ecomm/library/public_consult/termination_rates/index_en.htm (C.D./transl.rt)