ECONOMY

Lower charges for calls to mobile networks

The National Telecommunications and Post Commission (EETT) is now rushing to reduce the termination rates for calls to cell phone networks.

On Monday the commission put up for public consultation a draft set of measures for the market that slashes termination charges up to 80 percent, which renders landline calls to cell phones cheaper and indirectly cuts charges between cell phones.

EETT recommends the reduction of the charge for hanging up from just under 0.05 euros to just over 1 cent (0.0103 euros), which is about level with the European Union average.

This cut to the charges should have applied from January 1, but EETT has delayed the implementation of the recommendation of the European Commission. The new rates, according to the draft for consultation, will apply gradually from August 1 until December 31, 2012. Until then, however, consumers will have lost tens of millions of euros, given that in 2010 the termination rates were calculated at 250 million euros.

The reduction of termination rates will immediately apply to calls from OTE telecom landline phones to cell networks, as this is what the regulation dictates for organizations with a dominant position in the market.

However, for competition purposes, OTE?s direct competitors, such as Forthnet, are set to follow suit, while the drastic cut in termination charges is set to lead to a cut in OTE?s call-hold charge that now amounts to about 0.03 euros per minute and is unlikely to remain higher than the termination charge.

The massive cut to these charges is the result of an intervention by the European Commission aimed at cutting the cost of cell telephony in the European Union. There has been a similar charge slash in several EU countries to date such as Belgium (down to 0.0108 euros), France (0.0080), Spain (0.0109), Great Britain (0.0081) and Italy (0.0098).

EETT?s move to go ahead with the cut in termination rates has taken the market by surprise. The industry had received some signals about the application of an official calculation mode for termination rates based on the model the European Commission is proposing under the title LRIC.

To that end the EETT recently commissioned the University of Athens to run this specific model in order to calculate charges. However, this calculation will require about seven months from the signing of the contract, which has not yet been signed.