LONDON (03/21/2000) - European mobile service providers could be overcharging customers for incoming calls from fixed lines by up to 4.5 billion euros (US$4.4 billion) annually, according to a study commissioned by the European Competitive Telecommunications Association (ECTA).
The study, which was researched by the consulting firm Analysys Ltd., examined the cost of completing calls over mobile networks across Europe using a method it developed with U.K. telecom regulator, the Office of Telecommunications (Oftel).
The study shows that mobile operators charge fixed line operators between 40 percent and 70 percent over cost for completing calls from fixed line customers. These charges are eventually passed on to the consumer, according to the report, released last Friday.
The problem is that while fixed operators have to offer call termination at cost, mobile operators do not have regulated rates, ECTA said.
The study concluded that as call prices rise over the coming years and networks become more efficient, the surplus of charges over costs could double or triple under the current structure, ECTA said.
ECTA has presented the report to the European Commission, which is conducting a review of communications regulations.
In the past, the Commission has issued benchmark rates for interconnection between fixed operators that has led to reductions in cost. ECTA believes that a similar approach would help the mobile industry in the short term, according to the study. ECTA wants legislative changes in the industry to be drafted by 2003, the association said.
The full report, "Economic Studies on the Regulation of the Mobile Industry," can be purchased from ECTA for 500 pounds (US$785) plus tax.
ECTA, in Berkshire, England, can be reached at +44-118-979-3282, or at http://www.ectaweb.org/. Oftel, in London, can be reached at +44-171-634-8751 or at http://www.oftel.gov.uk/.