The European Commission has published its draft proposal for implementing uniform termination rates across the EU. Following a public consultation and opinion from telecoms regulator Berec, it aims to adopt the delegated act by the end of 2020. The new cap on fixed rates will be implemented from 2022 at the latest, while mobile termination rates will drop gradually to 2024.
Uniform fixed and mobile termination rates are a key part of the EU's new Electronic Communications Code, and the European Commission has been consulting the market for over a year on how to adopt the new rates. The Code sets out the principles, criteria and parameters that the Commission should use to set the rates. These include the requirement that the maximum rates should be based on the recovery of long-run incremental costs of an efficient operator, thereby avoiding excessive wholesale prices and contributing to key policy objectives of the code, such as promoting competition and the development of the internal market.
The proposed rates are 0.2 eurocents per minute for mobile and 0.07 cents for fixed calls. Given that current mobile termination rates are on average significantly higher than the proposed cost-efficient rate, the Commission plans a three-year glide path to move towards the lower rate.
That means caps of 0.7 cents in 2021, 0.55 cents in 2022 and 0.4 cents in 2023, in order to reach 0.2 cents in 2024. However, any countries with maximum rates already below these rates must leave the lower prices in place at the entry into force of the EU legislation. This means that in 2021, maximum mobile termination rates in Sweden (0.2 cent), Portugal (0.4 cent), Malta (0.4 cent), Ireland (0.43 cent), Cyprus (0.48 cent), Denmark (0.52 cent), Hungary (0.53 cent), the Netherlands (0.58 cent), Greece (0.62 cent), Croatia (0.63 cent) and Spain (0.67 cent) shall be maintained. They can implement the EU's glide path in subsequent years, as the EU rates drop below their current prices.
For fixed termination rates, there is a much wider current range, but on average several countries are already close to the proposed cap. The 12 countries more than 20 percent above the proposed EU cap will be allowed a transitional step in 2021, before applying the new rate from 2022.
The rates proposed are based on the results of two cost models, constructed in line with the provisions of the code by external consultants. Both models have been built in collaboration with Berec and experts from national regulatory authorities as well as subject to multiple rounds of public consultation. Berec is expected to deliver its final opinion in October.
The draft act is available on the Commission’s website for public feedback until 22 September.
