The European Union (EU) has unveiled plans which could lead to a 70% drop in mobile termination rates, although the guidelines could also increase the cost of owning a phone. EU Information Society Commissioner, Viviane Reding said she plans to end big differences in mobile termination rates between EU states and cross-subsidies between mobile and fixed-line termination rates at some operators. Her proposals would edge Europe closer to the "bill and keep" pricing structure obtainable in the United States. Commenting further, EU Competition Commissioner, Neelie Kroes said the plans will eliminate distortions in competition between fixed and mobile operators: "Truly cost-oriented termination rates will increase competition to the benefit of consumers. Consumers should expect to pay lower retail prices as a result."
Regardless of the merits of the new proposal, any noticeable increase in the cost of owning mobiles for those with less disposable income is bound to elicit a torrent of complaints. Global Insight believes that if EU customers are asked to pay to receive calls, populism, coupled with the prevailing anti-EU mood across the region could become an issue.
