Ofcom to defy EU over termination fees

OFCOM, THE UK telecoms regulator, is to go ahead and defy the EU over its policy of enabling operators to recover the cost of their 3G licenses, according to a report in the FT.

The dispute centres around how much the mobile operators can charge each other for 'terminating' (connecting) calls made to their mobile networks.

Basically the EU's argument is that these termination charges are too high because they are based on historic costs - what the operators had to pay for the licences in the first place. Instead the EU wants the charges to be based on current costs for running a 3G network.

The EU's view is too simplistic, of course. Governments of countries such as the UK and Germany charged an absolute fortune for the 3G licences. In some EU countries the licences were awarded for free and in others they were awarded as the result of a 'beauty contest'.

So to try to insist that there is a 'true' cost for operating a 3G mobile network across the entire EU is patently absurd.

The INQ wonders whether this move will set a precedent for another EU vs Ofcom battle - namely over the high cost of roaming charges when subscribers travel outside of their home market.

Roaming charges are well known to be a tithe the mobile operators place on their subscribers to recover the cost of the 3G licences. Especially as the predicted huge rise in revenues from data services over 3G never actually appeared. µ