What are Termination Rates?
A voice call termination service (fixed or mobile) is necessary for a voice call operator to connect a caller with the intended recipient of a call on a different network. This service can only be provided by the operator serving the called subscriber (the terminating operator). Wholesale termination rates are the rates which operators charge each other for the termination of voice calls on their networks.
Given that the terminating operator is the only operator able to terminate calls on its network, it can be considered a monopolist in the market for the termination of calls on its network. This could lead to excessive prices for wholesale termination services, which increases the risk of these excessive prices being passed to the consumer in the form of higher retail prices.
In order to mitigate this risk, Member States currently regulate wholesale termination rates in line with the European Commission’s guidance (the non-binding Termination Rates Recommendation, in force since 2009). However, in spite of this recommendation, divergences between the maximum termination rates in Member States remain. Such divergences hinder cross-border competition and service provision.
Why is the Commission Intervening?
The European Commission, in its Digital Single Market strategy, aims to create consistent regulatory conditions for a single, competitive market in digital services. The project follows calls by Member States and national regulatory authorities (NRAs) to simplify termination rates regulation, and protect EU consumers and businesses from excessive prices for telephony services. A European-wide maximum termination rate would reduce fragmentation in the telecoms market, thus ensuring a more competitive, cross-border environment, which will ultimately benefit European consumers. The European Electronic Communications Code adopted in December 2018 by the European Parliament and the Council provides the European Commission with the legal basis to regulate termination rates, in the form of a Delegated Act to be adopted by 31 December 2020.
Why we are consulting and for whom
In line with its principles of Better Regulation, the Commission is proposing an open public consultation on voice call termination rates in the EU. This consultation aims to identify the scope and application of the future Delegated Act, including the types of services that should fall under the definition of voice call termination services. All strata of European society, including citizens, representatives of the industry, academics and public sector institutions, are encouraged to respond to the consultation. The public consultation will also be available to stakeholders outside the EU.
The consultation will remain open until 8 November. Answers received in the course of the consultation period will feed into the policy development process. The questionnaire is now available in all EU official languages.