Extracts from the joint press conference by Viviane Reding and Neelie Kroes on telecoms termination rates

Type: Summary of press conference   Reference: I-061513   Duration: 10:31:34  Lieu:
End production: 07/05/2009
Viviane Reding, Member of the EC in charge of Information Society and Media, and Neelie Kroes, Member of the EC in charge of Competition, held a joint press conference to address the press and the public on the fact that on 7 May the European Commission has set out clear guidance for EU telecoms regulators on the cost-based method to be used when calculating termination rates – the wholesale fees charged by operators to connect the call from another operator's network which are part of everyone's phone bill. The guidance was in the form of a "Recommendation" that national regulators were obliged to take "the utmost account" of. The Recommendation indicated specifically that termination rates at national level should be based only on the real costs that an efficient operator incurs to establish the connection. Eliminating price distortions between phone operators across the EU would lower consumer prices for voice calls within and between Member States, saving business and household customers at least €2 billion in 2009-2012, and help investment and innovation in the entire telecoms sector. Mobile termination rates varied widely in the EU in 2008 from 2.00 euro cents per minute (in Cyprus) to 15 euro cents per minute (in Bulgaria). Mobile termination rates (on average 8.55 euro cents per minute) were also typically 10 times higher than fixed termination rates (on average ranging from 0.57 to 1.13 euro cents per minute). Higher mobile termination rates made it harder for fixed and small mobile operators to compete with large mobile operators. These divergences, and differing regulatory approaches, undermine the Single Market and Europe's competitiveness.

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TIME DESCRIPTION DURATION
10:27:28 Title 00:00:00
10:27:28 Arrival of the speakers 00:00:04
10:27:33 SOUNDBITE by Viviane Reding, Member of the EC in charge of Information Society and Media (in ENGLISH): What will the Recommendation adopted today do? Well, it will first help eliminate price distortions between big and small mobile phone operators across the EU and also distortions between fixed and mobile operators. It will also lower consumer prices for voice calls – remember that termination rates are ultimately included in everybody's phone bill-. And it will help to create a level-playing field and more consistent regulation on the European Telecoms Market, thereby triggering investment and innovation. 00:00:40
10:28:13 Cutaway: written press 00:00:04
10:28:18 SOUNDBITE by Viviane Reding (in ENGLISH): Sweden, Finland, France, Italy, Austria and Romania, they have started to go to the right direction. Still we face varying rates from one Member State to another. Now it starts from 2 eurocents in Cyprus and goes up to 16 eurocents in Bulgaria, with Germany in between with 8 eurocents and Greece with 10. Such fragmented price regulation poses a serious risk to our borderless internal market and a threat to Europe's competitiveness. These wide differences cannot be explained by costs or national circumstances. They are real distortions in the competition between Member States, and also between fixed and mobile operators. 00:01:01
10:29:19 Cutaway 00:00:05
10:29:24 SOUNDBITE by Viviane Reding (in ENGLISH): According to the existing EU telecoms rules, national regulators are required to take "utmost account" of the Commission's Recommendation. This implies that regulators will have to bring termination rates in their countries down to the level of efficient cost, starting by today and completing this task by the end of 2012. 00:00:31
10:29:55 Cutaway 00:00:04
10:30:00 SOUNDBITE by Neelie Kroes, Member of the EC in charge of Competition (in ENGLISH): Mobile termination rates are still ten times higher than fixed line termination rates, and five to six times above the cost of providing the connection. Any justification for this, for example in terms of mobile operators having higher costs because of the need to set up the networks, is long gone. It is just a past century issue. 00:00:31
10:30:32 Cutaway: members of the audience 00:00:05
10:30:37 SOUNDBITE by Neelie Kroes (in ENGLISH): By forcing prices down, we are levelling the playing field in particular for small mobile operators, but also between fixed and mobile operators, and ensuring that more competition is possible. We estimate that eliminating price distortions between the phone operators across the EU will lower consumer prices for voice calls within and between Member States, saving business and household customers at least 2 billion Euros in 2009-2012. And that is just in the short term. In the mid-to-long-term, the overall gain to society as a whole resulting from increased competition will be much greater. 00:00:56
10:31:34 Cutaway: members of the audience 00:00:05
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