10% cut in mobile termination fees

4 Dec 2007

Telecoms regulator Bundesnetzagentur (BNetzA) has set termination rates for the four German cellcos T-Mobile Deutschland, Vodafone Germany, E-Plus and O2 Germany. The new fees are valid from 1 December 2007 and are EUR0.0792 (USD0.116) per minute for Vodafone and T-Mobile, and EUR0.088 for E-Plus and O2, down from EUR0.878 and EUR0.0994 respectively. BNetzA used a cost-based calculation to set the new termination fees, based on data provided by the operators, instead of the international comparison model it used last year. The new termination fees will apply until 31 March 2009.

The German Federation of Alternative Telecom Providers VATM welcomes the decrease of the termination fees, but questioned the difference between the rates that the two larger operators (T-Mobile and Vodafone) may charge compared to the smaller two. VATM spokesman Axel Spies said, ‘In general, it is good news for the consumer that BNetzA lowers the termination fees, but a lot of uncertainty remains: Firstly, BNetzA’s determinations rely on the cost documents of only one mobile network operator in Germany and do not take into account the different costs models that the four German mobile network operators are using. Secondly, lowering the span between the termination rates that the small and the large mobile operators are allowed to charge from EUR0.0116 to EUR0.088 cents is not justified because the investments of the smaller and newer operators (E-Plus and O2) are higher than those of the larger mobile operators. The new termination rates do not fully reflect this difference and are burdensome for the small operators.’

Breko, the association for alternative broadband providers, is of the opinion that the mobile termination fees are still too high in comparision with the termination fees that fixed line telcos receive for mobile to fixed calls. That rate is EUR0.00069 per minute, eleven times lower than the new mobile fees. BNetzA has missed a change to correct the difference between the fees after years of non-regulation, according to Breko’s director Rainer Lueddemann.