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European phone operators deny EU cost plans will help consumers
2008-09-12
BRUSSELS (AFP) - Five European mobile telephone operators released a study Friday aimed at proving that EU plans to force them to cut certain mobile phone costs will not reduce prices for consumers. In late June, EU Telecommunications Commissioner Viviane Reding promised to cut by 70 percent over the next three years "mobile termination rates" charged by the operator of a person receiving a call, to the one who made it. The costs, which vary in the EU from two to 19 euro cents per minute for a call with a mobile telephone, are around nine times those charged from a fixed phone, and Brussels believes that lowering them will benefit consumers. The study -- for Deutsche Telekom, Orange, Telecom Italia, Telefonica and Vodafone -- found that cutting these costs "would not necessarily lead to lower overall costs for owning and using a phone". It could also "lead to lower penetration rates and consumer welfare", with penetration dropping by around nine percent in zones where mobile termination rates (MTRs) could be cut to the two cents the European Commission is seeking. The study noted that customers in the United States -- where MTRs are lower than in Europe -- are paying an average 11.73 euros (16.52 dollars) more on their mobile phone bill each month, even though call costs there are lower. Reding is due to finalise her cost-cutting plans by the end of the year, and the study is yet another sign that Europe's telecoms industry plans to do its best to water them down.
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