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EU Telecoms Reforms - You Can Keep Your "bill and Keep" Ms Reding
The EU telecom regulator, Ms Vivienne Reding, wants mobile operators to make further deep cuts in termination rates to reduce "excessive profits" and reduce the cost of mobile ownership for the benefit of consumers. However, she also likes the idea that customers should pay to receive calls - as they do in the under-penetrated markets of North America. While the call for lower termination rates is a well-worn issue, the idea that we should move to a "bill and keep" system is new. Quite how this is "pro-consumer" eludes us.
If I have to pay to receive calls, my bill will rise unless the price I pay for outgoing traffic falls by more than the amount I pay for calls coming in the other direction. Operators wonĂ't want to make such cuts, especially if they have also been forced to slash termination rates. And what if the double glazing or insurance industry start calling me as they do on my landline? My only recourse would be to change my number or more likely, turn off my phone. And even if I donĂ't do that, others will… meaning that the utility of the whole system is compromised. Is that really what the EU wants?
For this to work for consumers, Ms Reding will have to be able to force through cuts on outgoing tariffs as well as terminations. This implies that in the EU, just as in the former Soviet Union, big bureaucracy has the right to tell industry what and how to charge its customers. The difference between the two is that, of course, in the USSR, there was no separation between state and industry and individuals, as there is in the democracies of the EU member states.
Ms Reding seems to be suffering from a misapprehension about what industry exists to do, which is to make money for their shareholders. Operators should begin to stand up for themselves and reject these proposals out of hand. After all, in the recent past, they paid over €100bn in licence fees to various governments for the right to operate mobile services within the EU, on terms which were then well-defined. Interference of the kind Ms Reding proposes would amount to a fundamental re-writing of the rules and under those circumstances, it would seem reasonable for the operators to ask for some or all of that licence money back.
Posted to the site on 4th September 2008
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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