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Euro mobe companies mass against cap proposals

Call my termination-rate bluff

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Five European mobile operators have ganged up to fight Viviane Reding's proposal to cut termination rates by 70 per cent, with a study showing that it will lead to mobile phone users paying more.

The study comes from Deutsche Telekom, Orange, Telecom Italia, Telefonica and Vodafone, and finds that capping termination fees "would not necessarily lead to lower overall costs for owning and using a phone", not to mention leading to millions of people giving up mobile use entirely, and (quite possibly) the end of the world as we know it.

Vodafone has spun this line before. Back in 2002 the company claimed that capping termination rates would put 20 quid onto the cost of a pre-paid handset, which would see between 10 and 15 million punters giving up mobile communications in the UK; but that never happened, despite the cap.

Last week Voda was claiming that 40 million people will chuck their mobile phones if the cap on termination rates goes ahead, but this latest study goes further with the claim that punters will end up paying more for mobility.

The study points out that in the USA, where termination rates are much lower, punters pay an average of €11.73 a month more to their network operators, but that figure includes all services and features, so the comparison is unlikely to be particularly useful.

The proposal from the EU isn't designed to get rid of termination rates, just to cap them heavily, something that mobile operator 3 reckons won't hurt anyone.

"As they stand, the European Commission's proposals at the wholesale level will allow operators to recover the costs they incur in terminating calls from other operators' networks," CEO Kevin Russell told us in a statement. "There will be no need to charge consumers for receiving calls."

Which will come as a relief to Reg readers who seem to find the idea so objectionable - but we'll have to wait until the end of the year to find out how resolute Ms Reding is, and whether she can garner sufficient support in the EU to have the cap mandated. ®

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