EC hits back at report of price caps disappearing on fixed voice

EC hits back at report of price caps disappearing on fixed voice

18 SEP 2014

The European Commission has reacted to a Reuters story saying it plans to remove existing price caps on fixed calls.

The mobile sector and VoIP players have eaten away at the fixed sector in recent years to the extent that regulation is less necessary, argue fixed operators.

Fixed incumbents Orange, Telefonica and Telecom Italia are likely to receive a revenue boost from the liberalising proposal, said Reuters.

But the commission pointed out to Mobile World Live: “If it is determined that a market no longer needs regulatory intervention, then competition should be able to keep prices at a competitive level.”.

The Reuters report also said fixed operators will be allowed to set their own prices, both for retail and wholesale pricing for fixed calls.

But operators have been free to set their own prices for fixed calls for several years, said the commission. And markets for call services have been removed from the list of relevant markets too, it added.

“With regard to the wholesale relation between the incumbent and alternative operators, we believe that this market no longer passes the so-called three-criteria test and should therefore no longer be regulated, however, individual NRAs might come to a different conclusion,” the commission told Mobile World Live.

Overall, said the commission, its recommendations are about market delineation and identifying which markets still warrant ex ante regulation on an EU level. “It is not about the imposition or removal of remedies,” it said.

Fixed incumbents have seen much fixed traffic shift onto their own mobile networks over the years.

The commission’s proposal will be introduced in October subject to approval by EU governments, said Reuters.

Interestingly, the picture for incumbents varies across Europe, according to research published by the commission at end-July. In more competitive markets, such as the UK, incumbent market share of fixed voice has fallen below 40 per cent (2012 figures). In contrast, some markets in central and eastern see incumbent share of the same service at 80 per cent or 90 per cent.

National regulators will retain the option of reimposing regulation on fixed calls if there is insufficient competition.

Germany’s BNetza said in July that it will continue to regulate fixed calls. Deutsche Telekom’s market share is about 50 per cent, according to the commission’s own figures.


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...

Read more