Only yesterday did I report on the somewhat confusing statement from the European Commissioner regarding RPP (receiving party pays), but now we have more TLAs (three letter abbreviations) flying at us – now it’s MTRs, or Mobile Termination Rates… read on to see why although a 70% cut sounds good, it could actually mean things will be more expensive. And yes, the pic is of European Commissioner Viviane Reding again…
MTRs are essentially the feeds that mobile operators charge for handling each others’ calls – Vivian Reding has said she wants to bring these fees down overall – “levelling the playing field” right across Europe. These fees by the way, comprise about 20% of an MNOs revenues – that kind of drop means the money is going to have to be found from somewhere (yes, this story is going exactly where you think it is…)
However, the GSMA (industry lobby which represents operators) has said that national regulators are better placed to set the MTRs, since these varied widely across Europe.
In addition, Vodafone, has said that they make about 15-20bn Euros per year from the MTRs, and as such the operators would not be able to suck up all the reduction – which quite simply means that the cost of owning a mobile phone (i.e. line rental) could well go up. 3 have also thrown their hat in to the discussion and said that they think the lowering of MTRs will be a good thing, as it will make the industry more competitive for new entrants …
So really a variety of views on the subject – what the reality will be is a different question!
The European Commission (the EU’s executive arm) will formally adopt the guidelines in the autumn and EU states are obliged to apply them or explain whey they are not doing so. The new methodology will be phased in by 2011.
[Via: Reuters]