91998E4063

WRITTEN QUESTION E-4063/98

by Jaime Valdivielso de Cué (PPE) to the Commission

(13 January 1999)

Subject: Communications

On 26 November 1998 the Commission announced that it would not proceed further with its investigations into three mobile phone service providers, including the Spanish national telephone company Telefónica, after they had cut their connection charges for calls from fixed to mobile telephones.

Could the Commission say when the reductions will take effect as far as Spanish users are concerned?

Answer given by Mr Van Miert on behalf of the Commission

(16 February 1999)

In 1998, the Commission initiated an in-depth investigation on the possible abusive level or discriminatory nature of certain interconnection rates applied by telecommunications operators in the Community. In this framework, the Commission opened two files involving the company Telefonica de España. The first concerned the prices charged by Telefonica to Airtel for terminating the mobile calls of the latter in its fixed network. The Commission found that those prices could be excessive or discriminatory. The second concerned the revenues retained by Telefonica in the case of calls from its fixed network to a mobile network. The results of the Commission inquiry indicated that the retention applied by Telefonica was in excess of a best practice benchmark established by the Commission.

In November 1998, after having examined the relevant data provided by Telefonica, the Commission decided to close the first file. The Commission inquiry related to interconnection charges between operators and not to the charges applied to final consumers. How the cost saving resulting from the new termination charges will be passed by the relevant mobile operators to the user is a matter for their commercial strategy. The entry into operation of the third mobile telephony operator in Spain will in any case put both incumbent mobile operators under pressure to improve their current offer to their consumers.

Furthermore, the reference interconnection offer of Telefonica recently approved by the Spanish government determines that the same termination charges for calls originating from fixed network operators will apply also for calls originating from mobile network operators, which should reduce significantly the charges applied to the latter. However, the Commission cannot anticipate to what extent or when those reductions of the prices for final consumers would take place, as those depend on the competitive pressure in the market and are decided by the companies offering those services.