Brussels cracks down on fixed phone call prices

After capping prices of mobile telecom services at EU level, the European Commission is now looking into tariffs of fixed telephone calls. In a letter sent to Belgian authorities, the EU executive requests price cuts at Belgacom, the country’s dominant operator.

“The overall prices for fixed telephony in Belgium are some of the highest in the EU. This is simply not acceptable for Belgian consumers,” underlined EU Telecoms Commissioner Viviane Reding, announcing that the EU would keep “a very close eye on the Belgian market” and that is expecting effective actions by the Belgian regulator in a year’s time.

According to figures provided by national telecoms regulators, local calls of three minutes in Belgium are the most expensive in Europe, costing over €20 cents, while the EU average is €10 cents. For a 10-minute local call, Belgacom charges users almost €60 cents. Only in Slovakia are prices higher.

The Commission cannot establish caps for local calls as it did for cross-border mobile services, but can push national regulators to apply rules meant to guarantee competition in their national markets. Indeed, this is how the EU executive has reacted to the Belgian case. “Measures taken by the Belgian telecoms regulator (BIPT) have not yet led to competitive prices for fixed line calls,” it concluded. BIPT has thus been requested to revise the system of price control set up at national level in order to decrease Belgacom’s tariffs.

Legislative actions to increase EU powers over national and local telecoms markets are set to be ruled out. The current Commission is close to the end of its term and is unlikely to start a complex new legislative process. Moreover, Brussels tends to consider competition on fixed lines to be sufficiently developed at EU level, thanks to the increased number of alternative services offerred (such as calls over the Internet) and more bundled products.

The action against Belgium was not the first such move, coming hot on the heels of a similar case concerning Italy. Indeed, it may not be the last either, as according to the most recent figures for the electronic communications market in general, published by the Commission in March 2008, fixed prices are as high in other countries like Slovakia, the Czech Republic and Ireland as they are in Belgium. 

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