Commission insists Spain must not delay cheaper mobile rates

Date: Sat, 03/10/2012 - 11:58 Source: The European Commission Press Department

The European Commission has suspended plans of the Spanish telecoms regulator (CMT) to postpone by a year the introduction of cheaper mobile termination rates (MTRs), the rates mobile networks charge other networks for delivering voice calls

Commission insists Spain must not delay cheaper mobile rates European Commission Vice President Neelie Kroes

These costs are ultimately included in call prices paid by consumers and businesses. CMT planned to delay cheaper rates until January 2014, one year later than the Commission's recommended deadline. CMT's proposed delay could result in one more year of unnecessarily high mobile consumer prices in Spain at a moment when Spanish consumers are already hard-hit by the economic crisis.
According to the timetable outlined in the Commission's 2009 Termination Rates Recommendation, cost-oriented mobile termination rates should be applied across the EU by 31 December 2012. These MTRs should be set at a level equivalent to what it costs an efficient operator to terminate calls on his network. In many countries, including Spain, MTRs are currently much higher. CMT has proposed to extend the transitional period for implementation by an additional year in order to protect the interests of the mobile industry in Spain.
The Commission disagrees with CMT's argument that a significant reduction of prices by December 2012 would have too negative an impact on the mobile industry in Spain. In the Commission's view the Spanish regulator has not shown that an extension to this deadline would be justified, in particular as the industry had since 2009 to adapt to the new MTR approach. In the letter sent to CMT today, the Commission has explained that this proposal does not comply with the principles and objectives of EU telecoms rules which require Member States to promote competition and the interests of consumers in the EU, as well as the development of the Single Market.
European Commission Vice President Neelie Kroes said: "Spanish consumers should not have to pay over the odds for mobile calls, especially when domestic finances are so tight. Industry has already had 3 years to adapt and a further delay of one year is unjustifiable. "
The Commission's position in this case is a further example of the Commission making use of its new powers regarding national remedies under Article 7a of the Telecoms Directive. CMT now has three months to work with the Commission and the body of European telecoms regulators (BEREC) on a solution to this case.

In February 2012 the Commission received CMT's proposal regarding its plans to regulate mobile termination markets in Spain. This included a price control setting out how to calculate mobile termination rates which required the operators in Spain to apply fully cost-oriented rates by 1 January 2014, i.e. one year after the deadline recommended by the Commission in its 2009 Recommendation.
The Commission has issued this serious doubts letter because the delay in the introduction of fully cost-oriented rates does not appear justified. In particular, the Commission is of the view that the interests of consumers have not been adequately considered by CMT. The Commission further highlighted that the Termination Recommendation of 2009 already provided for a transitional period until 31 December 2012, which was designed to allow the industry to adapt to the new recommended approach and mitigated any potential negative impact this approach may have.
Under the new powers of Article 7a of the Framework Directive, over the next three months the Commission, in close cooperation with BEREC, will discuss with CMT how to amend its proposal in order to make it compliant with EU law. In the meantime, implementation of the proposal is suspended.
The new rules also enable the Commission to adopt further harmonisation measures in the form of recommendations or (binding) decisions if divergences in the regulatory approaches of national regulators, including remedies, persist across the EU in the longer term.


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