The European Union (EU) touts a new mobile pricing structure that would radically change the existing system.
Any change in the pricing structure to "bill and keep" will push the EU towards the pricing structure used in the United States.
Although the plans could lead to overall cheaper prices, the prospect of charging customers for received calls is a potential landmine for the EU, regulators, and operators.
The European Commission has signalled its support for a radical overhaul of the pricing structure for mobile services in the region, in a move that is bound to hit operators' revenues hard and could lead to charges for received calls. Under the proposal being touted by the EC's Commissioner for Information Society and Media Viviane Reding, the telecoms industry will be forced to cut, and eventually harmonise, termination rates on the fixed and mobile networks. Reding will also support an initiative for mobile operators in the region to switch over to a "bill and keep" pricing structure and ditch the current reliance on negotiated mobile termination rates (MTR). The Commissioner has long posited that MTR distorts the market because it is significantly higher than termination rates for fixed telecoms services. In addition, she argues that termination-rate negotiations put undue burden on regulators and choke up time that could be used for other duties.
Shifting to "bill and keep" would mean operators get to keep whatever they bill their customers, and could result in mobile users paying for receiving calls. Citing the trend in the United States, where regulators argue that "bill and keep" encourages low consumer prices by encouraging more innovative pricing, Reding's department noted that the new structure could lead to new business models and more consumer-friendly schemes. Reding will not propose a cap on prices when she unveils her long-awaited recommendation, but will instead suggest a methodology for achieving a consensual price cap. "A shift to "bill and keep" was not expected "overnight" and there would be no compulsion," Reding's spokesman, Martin Selmayr, told a European Commission news briefing. "It's the operators' decision…a common methodology in the long run would lead to lower termination charges."
