EU regulators to ditch fixed-line call rates

18 September 2014

EU telecoms regulators have reportedly announced plans to abandon fixed-line phone call price caps in the region in a bid to help European operators boost revenue.

The plan is thought to be part of the regulator’s larger strategy of opening up the market and increasing competition, and is expected to be implemented next month, subject to approval by EU governments.

The proposal, seen by Reuters, states that operators like Orange in France and Telefónica in Spain would be authorised to set their own fixed-line call prices for both consumers and other operators using their networks.

According to ETNO – a telecoms lobbying group with members including Deutsche Telekom, Orange, Telecom Italia and KPN – fixed-line phone revenue dropped €5 billion to €59 billion in 2012, and the group believes the new EU proposal will help to boost investment in high-speed broadband infrastructure and enable operators to catch up with their peers in the US and Asia.

"Competition from alternative platforms and OTT service competition are today well-established and this recommendation is the right instrument to adapt regulation to the new market reality," a statement from ETNO read.

National regulators will still have the option of regulating prices for fixed-line calls as they see fit, as has been the case in Germany which said in July that it will continue to cap prices.

However, market watchers expect smaller operators, which have to lease capacity from incumbents to allow their customers to make calls, will be hurt by the move.

The ECTA, a telecoms group representing smaller players like TalkTalk, Wind and E-Plus, said that "such premature deregulation will harm competition and thus ultimately the users, be they consumers or businesses".

"In the vast majority of member states, end-users will have very little choice – often only one, the incumbent – if fixed voice regulation is removed," according to a statement from the ECTA.

Topics: EU, telecoms, regulators, price caps, fixed-line, incumbents, Europe