Euro majors cut mobile termination fees

[mkrishnan]

The NYT provided a great overview of what's going on with mobile termination (when phone users in Europe have to pay a per minute fee to call a mobile phone from a landline and/or from a competing network).

http://www.nytimes.com/2009/08/17/technology/17iht-terminate.html?_r=1&hpw

Since March, regulators in Germany, France and Spain have cut this special charge for calling a mobile phone — known as the mobile termination rate — by 30 percent to 50 percent. In Britain, Ofcom, the communications regulator, is considering how much to trim rates there.

Bigger mobile operators tend to collect most of the fees under the system, which was set up to compensate for the extra cost of connecting to a mobile network. Smaller challengers want lower fees so they can sell U.S.-style, network-neutral callingplans.

“The big rate cuts are redrawing the competitive playing landscape for operators in each market, altering the economics,” said Frédéric Doussard, an analyst at Oddo Securities in Paris. “But for consumers, this should only lead to even lower costs.”

The wave of reductions began in March after the European Commission urged European Union countries to lower termination rates, which average 9 euro cents, or 13 cents, a minute, to less than 3 cents by 2012. The commission has already mandated lower call- and data-roaming fees.

The changes have the potential to lower costs for iPhone and other users in various parts of Europe...