The European Commission yesterday (4 July) delivered a damning indictment of proposed changes to the cost of roaming and termination rates (MTRs) in Italy, which are already the highest in Europe. But it remains to be seen the question remains on whether their judgment will really matter.
"The proposed levels of MTRs provide comparative advantages to Italian mobile operators beyond the recommended imposition of cost-orientation," reads yesterday's letter to the Italian authority.
An MTR is a charge collected by an operator for calls it handles from a rival network. In 2009, the Commission asked regulators to begin reducing these charges and bring them down by 2012.
The Italian Communications Authority, AGCOM, which has recently gained a reputation as a bad pupil, notified the Commission that it would not seek to lower MTRs until 2015.
To boot, the Italian regulator told the Commission about its decision just days before new rules will bestow the EU executive with more binding decision-making powers on broadband and mobile pricing. At this point, the EU can merely make a comment in the hope that the regulator will comply.
Angry telecoms companies, lower down in the food chain, accuse the regulator of trying to sidestep the EU's authority, making matters worse for the Italian market.
"Though we can only guess this is why they did it, it seems they did it on purpose," an anonymous industry source told EurActiv.
Consumer groups have long argued that MTR unfairly burdens consumers with high mobile phone costs while operators claim the charges help to subsidise other services. In the UK, operators cut subsidies on prepay after Ofcom lowered MTR in 2010 as part of the EU's recommendation.
Under the new EU rules which were implemented on 25 May, formally called the Article 7 procedure, the Commission alongside pan-European body of regulators BEREC can issue a binding recommendation requiring the national regulator to amend or withdraw its planned remedy.
AGCOM's ability to sidestep these new procedures has angered other market players, who complain that current mobile termination rates are creating an uneven playing field.
"MTRs in Italy are too high and above effective costs causing significant market distortions," Tiziana Talevi, head of regulatory affairs at Fastweb, an alternative fixed operator in Italy, told EurActiv.
"The fixed operators are subsidising mobile operators instead of using the money to invest in their networks, and the mobile operators are using money from MTRs to enter the fixed market," Talevi continued.
Though the Italian market expects the regulator to heed the Commission's word, they predict it won't follow it to the last letter.
"They will make some changes but not how the European Commission envisaged," Marco Pierani from national consumer lobby Altroconsumo told EurActiv.
ETNO, the EU lobby for large telecoms firms, welcomed the Commission's stance on MTR, saying it supported "symmetric termination rates amongst mobile operators within national markets, in line with the EC Recommendation".
ECTA, the EU umbrella association for competitive telecoms, declined to comment on the case.
