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Dutch court waters down mobile rate cuts

A court in the Hague has ordered Dutch telcos to cut mobile termination rates, but by significantly less than the country's watchdog had been calling for.
Written by Martin Gijzemijter, Contributor

Termination rates in the Netherlands are on their way down — but not by as much as some had hoped for.

The Dutch regulator Autoriteit Consument & Markt (ACM) was planning to impose a significant reduction in the termination rates used by Dutch telcos. However, the watchdog was stopped in its tracks by a Dutch court this week.

Court ruling

The previous termination rate — the amount one telco charges another when one of its customers receives a call from one of theirs — was 2.4 eurocents per minute for calls made to mobiles.

The ACM believed that rate was far too high, an opinion shared by the European Commission, which recently stated that the rates should – at least – be cut in half.

The ACM was planning to impose a rate of 1.019 eurocents per minute from 1 September. However, Dutch operators KPN, T-Mobile and Vodafone brought a case before the trade and industry appeals tribunal in The Hague to oppose the level of the cuts, with the court finding in favour of the operators. The rates will still be reduced, but will cut to 1.861 cents per minute for calls to mobile phones and 0.302 cents per minute for calls to landlines (previously, the termination rate for fixed line phones was 0.37 eurocents).

Not over

The regulator said it is disappointed by the ruling.

"Since, historically, both reductions and increases of termination rates have been passed on to the consumer, it is the consumer who is truly affected by this decision. Although we are disappointed, we would like to stress that this ruling is provisional and by no means final," an ACM spokesman told ZDNet.

Until a final ruling is handed down — expected sometime next year — telcos will have to charge the rates set by the court on Tuesday.

Over the last couple of years, termination rates have been subject to increasing regulatory pressure, since there is no natural competition to lower them. Last month, a study showed that the Netherlands has the highest SMS termination rates in all of the European Union. The market for text messages however is not regulated and the ACM is unlikely to step in to change that.

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