TKK reduces mobile termination fees: Mobile telephone operators are paid 4.5 cents per minute, starting with 1 January 2009.

Press release dated 21 April 2009

In its meeting held on 20 April 2009, the Telecom Control Commission (TKK) finalized eight interconnection proceedings in which the fees for serving a voice call to a mobile phone network (mobile termination) have been fixed. For being served a voice call in their network, all mobile phone operators will be paid, retroactively as of 1 July 2008 an amount of 5.72 cents per minute and as of 1 January 2009 an amount of 4.5 cents per minute. The noticeably smaller fees are due to reduced costs. The reasons for the strong decrease of costs of all operators are the high increase of mobile voice minutes and the increased and successful use of mobile broadband.

Mobile termination fees will be reduced to 2.01 cents by 2011

On 20 April 2009, TKK also adopted draft decisions on market analysis of the operator-specific mobile termination markets for the period starting with approximately mid 2009 until the first semester of 2011 and found the mobile phone operators Mobilkom, T-Mobile, Orange and Hutchison to be companies with considerable market power (in the markets for termination into their own mobile communication networks). Therefore specific requirements are to be imposed on them, regarding non-discrimination, interconnection, publication of a standard offer regarding mobile termination service, as well as an obligation to practice cost based pricing. The obligation regarding cost based mobile termination fees has been operationalized due to the abovementioned decline of marginal unit costs for all operators in the form of a step by step half-yearly reduction of the respective fees (“glide path”) from 4.5 cents to 2.01 cents (as of 1 January 2011); this target figure is in line with the cost of providing efficient mobile termination service. Reductions of the fees for the termination service are in line with a forthcoming recommendation of the European Commission regarding termination fees.

Equal fees for all operators – a positive impulse for the fixed-link network

By stipulating symmetric fees for mobile phone termination, i.e. fees equal for all mobile communication operators, and brought considerably close to the cost of efficient service performance, competitive distortions resulting from excessive fees will be avoided. Lower termination fees to be paid by fixed link telephone network operators for termination of their calls into mobile networks, the fixed link sector and fixed link network customers will see their costs reduced, resulting in prevention of cross-subsidizing. It is to be assumed that both mobile telephone customers as well as fixed link network customers will benefit from the measure proposed.

Further proceeding: public consultation of the draft decisions

The market analysis decisions are presently being drafted and will now be consulted on the domestic and European levels; a final decision on the part of TKK can be anticipated before end of the first half of the year 2009.

The decisions will be available for download on the RTR-GmbH website under Decisions.