EU Warns UK Not To Overestimate Mobile Termination Rates

BRUSSELS -(Dow Jones)- The European Commission Monday warned the UK communications regulator, Ofcom, not to include the inflated charges paid by operators at the time of the 3G license auctions when calculating mobile termination rates.

Mobile termination rates are the fees mobile phone companies charge other carriers to terminate calls on their networks and are a significant input cost in providing the retail service of fixed-to-mobile and mobile-to-mobile calls.

In a letter sent to the UK watchdog, the commission said Ofcom's proposed termination tariffs are higher than necessary because it uses the high prices paid in the third generation license auction in 2000 in its calulations, rather than today's market prices.

"I am concerned that Ofcom's approach to calculate 3G spectrum costs could hinder the movement towards lower mobile interconnection prices," said Viviane Reding, the E.U. Commissioner for the information society and media.

The UK's five mobile operators are O2, Orange, T-Mobile, Vodafone and Hutchison 3G.

-By Carolyn Henson, Dow Jones Newswires; +32 2 741 1484; carolyn.henson@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 27th November 2006