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European Commission - Press release

Digital Agenda: Commission halts plans to control prices for Polish mobile operator AERO2

Brussels, 21 November 2011. Using new powers under Article 7a of the Telecoms Directive ( MEMO11/321 ) the European Commission has halted plans by Polish telecoms regulator (UKE) to set mobile termination rates for AERO2, a Polish mobile operator, without conducting a market analysis first. UKE's proposal would set rates at more than double the prices offered by AERO2's four main competitors, without justifying why such rates are needed. The arbitrary nature of this proposal therefore violates a key EU regulatory principle.

Neelie Kroes, European Commission Vice-President for the Digital Agenda, said on the subject of MTRs: "National Regulatory Authorities have to promote efficiency, sustainable competition and maximum benefit to end users. It is important that UKE abides by these principles in order to ensure the proper functioning of the market for the benefit of Polish and European consumers."

Under EU telecoms rules, UKE, like all other EU regulators, is obliged to assess the competitive conditions in various sectors of the national telecoms market. Regulators may only impose price controls, or any other suitable, proportionate and reasonable remedies, once their market analysis has concluded there is lack of effective competition. The Commission is concerned that, in breaking this fundamental principle, UKE's approach lacks predictability and creates barriers to the development of an internal market.

This is the second Commission warning send to UKE this month about its approach to mobile termination rates.

Background

Mobile termination Rates (MTRs) are the wholesale prices which telecoms operators charge each other for connecting incoming calls to subscribers using their networks and are ultimately included in phone call prices.

The Commission first expressed concerned about UKE's approach to AERO2 MTRs one year ago.

Since then, the introduction of Article 7a of the new Telecoms Framework Directive requires national telecoms regulators to notify the Commission, BEREC (the Body of European Regulators for Electronic Communications) and telecoms regulators in other EU countries, of measures they plan to introduce to solve market problems. National telecoms regulators have to take outmost account of Commissions recommendations, such as the Termination Rates Recommendation.

The Commission, in close cooperation with BEREC (the Body of European Regulators for Electronic Communications), will discuss with UKE the issues raised and possible amendments of the proposed measures in order to make them compliant with the EU law and to eliminate barriers within a single European market which they appear to create . An in-depth review of the notified measures will last up to 3 months. At the end of this three month process the Commission may issue a recommendation asking the national regulator to amend or withdraw its planned remedy.

Earlier this month the Commission questioned UKE's decision to merely publish non-binding recommended MTRs on its website rather than legally binding and immediately enforceable regulatory decisions (see IP/11/1308 ).

Useful Links

The Commission's letter sent to the Polish regulator will be published at

https://circabc.europa.eu/w/browse/03908b44-00b0-4f53-a729-86b8aa3fe6d2

Digital Agenda website: http:// ec.europa.eu/digital-agenda

Neelie Kroes' website: http://ec.europa.eu/commission_2010-2014/kroes/

Follow Neelie Kroes on Twitter: http://twitter.com/neeliekroeseu

Contacts :

Ryan Heath (+32 2 296 17 16); Twitter: @ECspokesRyan

Linda Cain (+32 2 299 90 19)


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