EC fumes over size of German termination cut

EC fumes over size of German termination cut

05 SEP 2014

A German proposal to cut by four per cent the charge made by operators for terminating voice calls on their networks has had a critical reception from the European Commssion, said The Financial Times (FT).

The proposal from Bundesnetzagentur (BNetza), the country’s telecoms regulator, is far less than the 40 per cent reduction which the commission has called for from Germany, which has the highest termination rates in Europe.

“If the German regulator has done this, it is basically declaring war,” said one unnamed commission official. “They know they are breaking the spirit of every agreement we have made, and possibly the law itself.”

The proposed cut is from €0.0179 per minute to €0.0172 per minute, with the reduction coming into effect from 1 December. BNetza also proposed a further reduction to €0.0166 from 1 December 2015 until the end of November 2016.

The proposed falls in termination rates are open for consultation until 1 October and are subject to approval by the EC.

The German regulator has faced criticism from the commission before about the level of the country’s termination rates.

“BNetza’s decision departs more dramatically from European averages and could motivate a more forceful intervention or a legal challenge by European bodies,” said JP Morgan analyst Hannes Wittig, quoted by the FT.

The German regulator said it had taken account of the commission’s views but its proposed rates reflected the cost of efficient service provision for a mobile operator.

This is not the first time this year that Brussels has crossed swords with a German regulator.

At the start of the year, the commission turned down a request by the German competition authority to review the proposed acquisition of E-Plus by rival Telefonica Deutschland, preferring to keep control of the process itself.

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Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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