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Germany Regulator to Lower Mobile Voice Termination Rates

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Germany's telecoms regulator, the Bundesnetzagentur has published a rate proposal for a new mobile termination rate under which the four German mobile network operators are restricted to a uniform charge of 1.85 ct min for terminating calls in their respective network from 1 December 2012.

To date, the four mobile network operators charged more or less the same rate varying from 3.36 ct/min. to 3.39 ct/min. for their call termination service.

"The rate published today is the outcome of very thorough examinations carried out in the last few weeks which revealed that the significant rise in data volumes of past years will continue. This increase is largely due to the successful marketing of smartphones by the mobile network operators", explained Jochen Homann, president of the Bundesnetzagentur.

"This development will continue to shift the ratio between speech and data traffic. Speech traffic will continue to generate less costs, implying that this type of traffic will bear a correspondingly lower share of a mobile network's overall costs. This is the main reason for the ongoing downward trend in the per-call price for termination services. In the last few rate approval procedures this phenomenon had already resulted in significantly lower rates. The current decision is based, in part, on the lower costs for termination. But it also gives the network operators the chance to continue investing in broadband expansion, especially LTE, since the demand for mobile data services on the part of mobile customers is on the rise. The operator with a sophisticated network attracts most customers," Mr Homann continued.

The regulator said that the mobile termination rate has been calculated on the basis of the costs of an efficient reference network operator meeting 25 percent of overall demand for speech, SMS and data conveyance in Germany. This yields a uniform rate for all mobile network operators. The cost calculations were primarily based on an analytical cost model developed by WIK-Consult GmbH.

"For its rate calculation the Bundesnetzagentur resorted to its proven method based on the rates of an efficient operator and by doing so has in this instance chosen to deviate from a European Commission Recommendation. Following extensive investigations during which due consideration was given to all relevant aspects, we came to the conclusion that in Germany, the cost approach in the Commission Recommendation does not constitute a more suitable tool for achieving the regulatory goals set out in the German Telecommunications Act. We intend to explain our decision to the Commission and hope that we can convince the Commission of the validity of our arguments," Mr Homann went on to say.

The rate cannot come into effect immediately as a month-long national consultation on the draft decisions will be launched in the middle of next week at the end of which the Bundesnetzagentur will send its rates proposal together with the justification to the European Commission and the national regulatory authorities in the other EU Member States for comment.

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Tags: mobile termination rate  bundesnetzagentur   Germany