T-Mobile CEO slams EU plans to cut operator fees

27/06/2008 03:09

FRANKFURT (Reuters) - EU plans that call for a 70 percent reduction in what mobile operators can charge for handling each other’s calls are too drastic, the chief executive of Deutsche Telekom’s T-Mobile said.

"If that is the level, it is significantly below what we expected... and too drastic," Hamid Akhavan said on Thursday on the fringes of an industry event in Frankfurt.

EU Telecoms Commissioner Viviane Reding wants to bring down mobile termination fees charged by one operator for handling a call from another operator -- a common occurrence in a bloc of 27 countries and many phone companies.

Reding wants to end big differences in mobile termination rates between EU states and cross-subsidies between mobile and fixed-line termination rates at some operators.

"It is nothing we would support," Akhavan said, adding the industry had already seen annual declines for so-called mobile termination fees of 10-15 percent.

"The glide path should be on the level of the past years," Akhavan said.

Mobile operators generate around 20 percent of revenue from termination rates.

The EU guidelines contain no numerical cap for mobile termination rates and their equivalent for fixed-line calls but set out which charges can and cannot be included.

The new methodology will be phased in by 2011.

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If the guidelines are applied properly, mobile and fixed-line termination rates will converge to around 1.5 to 2.5 euro cents (1.2 to 2 pence) per minute, the Commission said.

Akhavan said he did not see a need for regulation at all.

"There is no reason to regulate an industry, which is already making less money than last year."

(Reporting by Nicola Leske, additional reporting by Huw Jones in Brussels)

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