Europeans May Have to Pay to Receive Phone Calls

Europeans could end up having to pay to receive phones under a proposal from EU telecoms commissioner, Viviane Reding who said that she was open to the concept in exchange for lower termination rates. In an interview with the Financial Times, she said " The whole market is developing, so we should not stay on the rules that have been in place 10 years"

The move could position Europe closer to the model followed in the USA - which while it has some of the lowest calling rates around, also has a much lower population penetration level. Ms Reding has been leading a crusade against the phone operators for several years, specifically on the issue of international roaming. It could be argued that as an EU commissioner, she has some interest in international roaming, but the administration of domestic termination rates are more likely to be fiercely protected by the national regulators.

Ms Reding attacked European mobile termination rates as "guaranteed money" that created "real distortion" in the EU single market. Formal proposals to lower the mobile termination rates are expected to be published within the next few weeks.

Ms Reding wans the pan-EU average mobile termination rate cut from 8 euro cents a minute to closer to 1 or 2 euro cents a minute by 2012.

Mexico introduced Caller Party Pays (as the current European model is called) in 1998 and saw a ten percent jump in mobile usage within the first month. Technically, CPP is available within the USA, although practically no one offers the service.

On the web: Financial Times

Posted to the site on 16th June 2008