ECONOMY

Mobile phone operators to cut termination charges

Three months after being characterized as a significant power in the local mobile telephony market, CosmOTE yesterday took steps to align its fixed-to-mobile call termination charges closer with European levels. In March, the National Telecommunications and Post Commission called on CosmOTE and Vodafone Panafon to converge its fixed-to-mobile termination rates with those governing mobile-to-mobile calls because of the two operators’ significant influence in the mobile telephony market. The commission’s intervention came after mobile phone operators failed to cut termination rates even as they slashed mobile charges. The inconsistency meant that Greece had the highest call termination tariffs in Europe, it said, noting that the EU average rate amounted to 0.18 euros a minute while Greek operators were charging above 0.29 euros. The commission said consumers stand to save 49 million euros from a 10-percent rate cut. The commission did not specify a timescale for CosmOTE or Vodafone Panafon to cut its rates but indicated that a reduction by the end of the year would be welcomed. CosmOTE said yesterday the new rates would come into effect on June 30. Fixed-to-mobile termination charges will fall to 0.18 euros per minute from 0.234 euros, making calls cheaper by 23 percent. The operator will, for the first time, levy a call set-up charge of 0.05 euros for each call. Vodafone Panafon said it will announce its new rates on June 25. According to an announcement by OTE yesterday, the company has reached agreement with the telecoms operator setting fixed-to-mobile termination charges at 0.21 euros per minute, down from the current 0.27 euros. The new rates will come into force on June 30. Analysts were divided as to whether the lower rates would affect the mobile operators’ bottom line. «It won’t have a tragic impact but there will definitely be a significant effect on revenues in the second half of the year,» said George Pittas of Hellenic-American Securities. He sees a 5-percent fall in turnover for CosmOTE. Theodore Ritsios, telecoms analyst at P&K Securities, said the introduction of call set-up charges will help to partially offset lower revenues from termination tariffs. He said CosmOTE will gain from the new charge in the case of calls lasting less than a minute. «Broadly speaking, the tariff rebalancing will be neutral for the two mobile operators,» he said. While Stet Hellas, the third-ranked operator, is under no obligation to reduce its charges, it could be forced to follow suit in order to maintain subscribers. «As Stet Hellas would have the highest rates after the other two companies trim their tariffs, it could be forced to adjust its charges,» Ritsios said.