Thursday, November 9, 2006

Germany Orders 16% Cut in Mobile Termination Rates

Germany's Federal Network Agency (Bundesnetzagentur) approved a 16% decrease in the rates for call termination in mobile networks. The cut, which will occur in three steps, addresses a conflict between fixed-line and mobile providers.

The regulator said the three rate approvals are addressed to T-Mobile Deutschland, E-Plus Mobilfunk GmbH & Co KG and O2 (Germany) GmbH & Co OHG.

"With our decision we are correcting a competitive distortion between mobile communications and the fixed-line network and have established planning and legal security for all players. At the same time, we have aligned ourselves with comparable and efficient European mobile operators. In particular, this detailed benchmark ensures that German fixed-line customers do not need to pay more than in cheaper EU countries. On the other hand, the gratifying competition among mobile operators is being retained and the requisite adaptation process structured in such a way to correspond to comparable cost-based trends in Europe," said Matthias Kurth, president of the Federal Network Agency.

The actual rates amount to cent 8.78 for T-Mobile and cent 9.94 for both E-Plus and O2 (Germany). A decision on the termination rates of Vodafone D2 GmbH will be taken at a later date due to legally prescribed time schedules. For this reason the lower rates will not come into effect until 23 November 2006. Until then, the previous rates of cent 11 and cent 12.4 will remain unchanged. For the whole approval period lasting from 30 August 2006 to 30 November 2007, this results in an average rate level of cent 9.22 for T-Mobile and cent 10.43 for E-Plus and O2, corresponding to a decrease of roughly 16 per cent compared with the previous rates.


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