Monday, 9 February 2009

Mobile telco's fail against Reding on mobile termination

Quite a bit on Mobile Termination fees in the news today . In the EU big Mobileco’s made a last ditch effort to persuade ms. Reding and mr. Barosso not to cut rates. In India new entrants asked the government to abolish mobile termination rates all together. India is a great example for the EU, on the effects of cutting mobile termination rates. In the EU the average mobile termination rate is 8.7 euro cent (and as high as 15.09 cent in Bulgaria) In India there is a proposal on the table to bring down mobile termination from 0.48 euro cent a minute to 0.16 euro cent per minute (or 1% of what the Bulgarians pay). Small operators of mobile networks even call for the full abolishment of termination charges. Meanwhile mobile usage in India has increased from '326 minutes per subscriber per month in October 2003 to 464 at present'. That's 2 times more than in the EU!

BTW the mobileco's are scaremongering when they say that their revenues will drop. What is most likely to happen when termination rates drop in the EU, is that the net outpayment from fixed lines to mobile lines will drop dramatically, saving users of fixed lines (old people and companies) a bundle. The ARPU's of mobileco's don't need to drop down dramatically as they can offer more minutes of use in bundles that cost about the same as current bundles. In the US and Singapore mobile termination fees don't exist and ARPU's are comparable or above those of the EU. ($29-46 in Singapore and $52 for T-mobile USA). Minutes of use in both countries is way higher than in the EU.

Now we'll have to wait until the negotiators of the T-mobile Germany, Vodafone UK, Telefonica and Orange France have frustrated the discussion in the European Council with the Commission enough

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