Fixed
to mobile termination rates - nowhere else to go
but down
Isabelle Paradis
September 2009
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info >>
According to the information released by HOT TELECOM
(www.hottelecom.com) in its latest report “Mobile
Termination Rate Europe 2009”, in the first
7 months of 2009 alone, the average MTR in Europe
was reduced by 10.3% to US$0.098/minute (€0.0068/minute).
Fixed to mobile termination rates (MTR) reduction
has been a hot topic in Europe for a few years now
and the subject is hotting-up. In May 2009, the
European Commission set out clear guidance for EU
telecom regulators on the cost based method to be
used to calculate termination rates, as it aims
at lowering fixed to mobile termination rates to
between US$0.021/minute (€0.015/minute)1 to
US$0,043/minute (€0.03/minute) by the end of
2012.
National regulators are therefore taking the necessary
steps to reduce fixed to mobile termination rates
closer to cost and to levels similar to the ones
found in the fixed to fixed or mobile to fixed realm.
Nevertheless, mobile operators around the European
region are objecting to these reductions, often
brining the matter to court, stating that the rates
proposed by their national regulator and the European
Commission would lead to significant revenue loss
and even a possible increase in mobile tariffs.
All the same, mobile operators are coming to terms
with the fact that fixed to mobile termination rate
reductions are inevitable in the long run.
National regulators’ efforts are starting
to bear fruits, with the average European fixed
to mobile termination rates having been reduced
by an average of 13.0% per year over the last 3
years, brining the average rate down from US$0.166/minute
(€0.116/minute) in January 2006 to US$0.109/minute
(€0.076/minute) in January 2009. In the first
7 months of 2009 alone, the average MTR in Europe
was reduced by 10.3% to US$0.098/minute (€0.0068/minute),
and more reductions are planned in countries such
as Austria, Bulgaria, Czech Rep, Hungary, Romania,
and Slovenia by January 2010.
Cyprus continues to enjoy Europe’s lowest
average fixed to mobile termination rate at US$0.029/minute
(€0.020/minute)2 followed closely behind by
Sweden at US$0.037/minute (€0.026/minute),
Poland at US$0.043/minute (€0.024/minute),
Austria at US$0.057/minute (€0.040/minute)
and the UK at US$0.06/minute (€0.042/minute).
Three of the top five European countries charging
the highest fixed to mobile termination rates come
from Eastern Europe. Bulgaria leads the way with
the highest average fixed to mobile termination
rate in the region, standing at US$0.160/minute
(€0.112/minute). Slovak Rep and Croatia follow
with US$0.149/minute (€0.104/minute) and US$0.131/minute
(€0.092/minute) respectively. Switzerland benefits
from Western Europe’s highest rate with an
average of US$0.151/minute (€0.106/minute),
followed by Ireland with US$0.136/minute (€0.095/minute).
Some countries in Europe have taken drastic steps
in the last 3 years to reduce MTRs to a more equitable
level. Slovenia’s regulator for example imposed
an average yearly reduction of 27.0% over the last
3 years to bring its average MTR down from US$0.252/minute
(€0.176/minute), the second highest in the
region at the time, to US$0.075/minute (€0.052/minute)
in August 2009. Other such countries which have
taken similarly radical steps include Poland, Belgium,
Portugal, Greece and Austria. 'Nevertheless, considering
the continued high level of termination rates in
some countries and the slow planned decreases, it
will be difficult for a lot of the EU members to
reach the European Commission target by the end
of 2012’ HOT TELECOM’s president Isabelle
Paradis said.
Find out more in HOT TELECOM’s new Mobile
Termination Rate Europe report: http://www.hottelecom.com/mobile-termination.html
