European Commission - Press release
Digital Agenda: Commission suspends discriminatory Danish SMS price regulation and starts an in-depth review
Brussels, 13 February 2012 - The Commission has written to the Danish telecoms regulator, Danish Business Authority (DBA), to express its serious doubts about the compatibility with EU law of DBA's proposed regulation of SMS termination rates, the rates mobile networks charge each other to deliver SMS between networks. DBA's proposal concerns the text messages sent to customers of the mobile virtual network operator Lycamobile (terminated on Lycamobile's network), which entered the Danish market in the first half of 2010. The Commission is concerned that the price control DBA proposes might be discriminatory as it treats differently SMS coming from operators providing telecommunication services in Denmark. Such SMS are subject to (lower) price caps while SMS coming from operators providing telecommunication services in other Member States, are not regulated. The Commission, in close cooperation with the Body of European Regulators for Electronic Communications (BEREC) will, over the next three months discuss with DBA how to amend its proposal in order to make it compliant with EU law.
Neelie Kroes, European Commission Vice-President responsible for the Digital Agenda, said: "While I agree with DBA's proposal to regulate the rates of SMS terminating on Danish networks with significant market power, such regulation must apply without discrimination on the basis of the origin of the SMS within the EU. Any national price regulation must be compatible with Single Market rules".
In May 2011, DBA introduced a similar regulation concerning SMS terminating on the networks of other Danish mobile operators. The Commission expressed similar concerns regarding the discrimination of SMS coming from operators providing telecommunication services in other Member States. However, at that time the Commission did not yet have the power (foreseen in the revised telecom framework which entered into force in May 2011) to request the regulator to suspend the adoption of such a regulation by starting an in-depth review. The amended Article 7 procedure leaves some scope for regulators to tailor approaches for achieving effective competition in their national telecoms markets, but requires them to notify draft regulations to the Commission in order to achieve consistency across the EU.
Under the new powers of Article 7a of the Framework Directive, the Commission, in close cooperation with the Body of European Regulators for Electronic Communications (BEREC) will, over the next three months, discuss with DBA how to amend its proposal in order to make it compliant with EU law and to eliminate those barriers within the Single Market which the proposed measure would create. At the end of the process, the Commission may issue a recommendation requiring the national regulator to amend or withdraw the proposed remedies.
Unlike a typical Mobile Network Operator an MVNO (Mobile Network Virtual Operator) provides services to customers through leased network assets. The MVNO pays a wholesale fee to access the radio frequency and mobile tower infrastructure needed to relay and connect calls.
The Commission's letter sent to the Danish regulator will be published at