Key Takeaways
- The EU-wide voice-call termination rates are now in effect, bringing a unified framework for mobile and fixed termination services across the Union.
- The new maximum termination rates aim to reduce fragmentation and promote a competitive, cross-border environment, leading to benefits for European consumers through lower prices and more diverse offers.
- Operators need to adapt to the new rates by applying a maximum rate specified in the Delegated Regulation to maintain cost-efficiency and ensure cost recovery.
- The rates differ for mobile and fixed calls, with gradual implementation allowing operators to adjust smoothly.
Introduction
The telecom industry is an ever-evolving landscape, and in the European Union, the implementation of the EU-wide voice-call termination rates marks a significant step towards harmonizing the digital marketplace. The Delegated Regulation sets single maximum Union-wide voice termination rates, introducing a more consistent pricing structure and stimulating competition for fixed and mobile calls. In this article, we delve into the implications of these termination rates on EU startups and the broader telecom ecosystem.
Understanding Termination Rates
Termination rates play a vital role in the voice-calling process, allowing operators to connect callers with recipients on different networks. Wholesale termination rates are the charges operators impose on each other for terminating voice calls on their networks. These rates are crucial in establishing a fair and competitive market environment.
The Gradual Implementation
The Delegated Regulation brings clarity to the maximum termination rates operators can charge each other for mobile and fixed termination services. For mobile calls, the single maximum termination rate is set at 0.2 eurocents per minute. Operators will achieve this rate through a three-year glide path, ensuring a smooth transition without significant disruptions. During the interim period of 2021-2023, operators in certain Member States can apply different rates as they progress towards the single maximum Union-wide mobile termination rate. By 2024, all EU operators should apply the uniform rate of 0.2 eurocents per minute for mobile calls.
For fixed calls, the single maximum EU-wide termination rate is 0.07 eurocents per minute. Given the substantial differences between the existing fixed termination rates and the final rate, the Regulation includes a transitional period during 2021 to allow for gradual adjustments. By 2022, all fixed operators will adhere to the maximum fixed termination rate of 0.07 eurocents per minute.
Benefits of Unified Rates
By introducing a single maximum termination rate across the Union, the EU aims to reduce fragmentation and encourage a more competitive, cross-border telecom environment. The unified rates will lead to lower prices and more varied offers for fixed and mobile calls, benefiting European consumers and fostering innovation in the telecom industry.
The Commission’s Intervention
The regulation of mobile and fixed termination rates has been a topic of discussion for around two decades. To bring consistency to price regulation across Member States, the Commission adopted the Termination Rates Recommendation (TRR) in 2009. However, rates continued to vary significantly across the Union. To address competition problems more consistently, the Code entrusted the Commission to establish a single maximum voice termination rate for mobile and fixed services.
Cost-Efficiency and Cost Recovery
The Code outlines clear principles, criteria, and parameters for defining the single maximum Union-wide mobile and fixed termination rates. These rates are designed to be cost-efficient and ensure cost recovery for operators, promoting a sustainable and competitive telecom landscape.
Preparing the Delegated Act
The Commission conducted a public consultation in 2019 to prepare the Delegated Act, and an Informal Expert Group, including experts from Member States, provided valuable advice. External consultants constructed cost models for both mobile and fixed termination rates, following strict criteria set in the Code and involving input from BEREC and experts from National Regulatory Authorities (NRAs).
Conclusion
The EU-wide voice-call termination rates represent a significant step forward in unifying the telecom industry and promoting a competitive environment. As EU startups adapt to the new rates, they can expect increased opportunities for innovation, lower prices, and enhanced customer experiences. The harmonization of termination rates sets the stage for a dynamic and thriving telecom ecosystem in Europe.
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