WRITTEN QUESTION E-0247/98 by Christoph Konrad (PPE) to the Commission (13 February 1998)

Subject: Exploitation of a dominant market position in telephone communications between mobile and fixed telephone networks

The prices for telephone conversations between GSM mobile telephones and fixed telephone networks are set at widely differing levels in the various European Union Member States. Moreover, in some markets these prices have remained stable in spite of a considerable drop in the cost of expanding the network.

1. Is there any justification for the suspicion that in some Member States mobile telephone companies have a dominant position in the market network for such conversations and are overcharging their customers for conversations between mobile and other networks?

2. Where such suspicion exists, does the Commission consider it has a responsibility to carry out a study on the level of inter-connection costs and their changesover time in the individual Member States - along the lines of the recently published study on inter-connection charges in the fixed network - in order to promote the efficiency of competition in the interest of the customer?

Answer given by Mr Van Miert on behalf of the Commission (30 March 1998)

1. Dominant market position and overcharging

The Commission has not as yet had to take a decision on any complaint regarding abuse of a dominant market position in connection with prices charged by mobile-telephone operators. Generally speaking, there is a high degree of competition between the various licence-holders on national mobile-telephone markets.

However, like all other network operators, mobile-telephone operators control call termination in their own network. The reason for this is that calls to someone subscribing to a mobile or any other kind of network necessarily terminate in that network.

The Commission does not have exhaustive data on price levels for calls between fixed and mobile networks. Call prices are very much dependent on the interconnection charges between networks.

Interconnection charges for calls from mobile to fixed networks are generally subject to the principles of transparency, non-discrimination and cost orientation laid down in the ONP (Open Network Provision) Directive ((Council Directive 90/387/EEC on the establishment of the internal market for telecommunications services through the implementation of open network provision (OJ L 192, 24.7.1990), as amended by European Parliament and Council Directive 97/51/EC (OJ L 295, 29.10.1997). )). Compliance with these obligations is monitored in each Member State by the regulatory authorities. Interconnection charges can be expected to fall in the future, leading to a reduction in consumer prices for calls from mobile to fixed network.

Under the ONP Directive, the interconnection charges of mobile-telephone operators are not subject to the same obligations of transparency and cost orientation as long as the operators do not possess significant market power, i.e. their share of the entire interconnection market does not exceed 25%. They are subject none the less to the Community's competition rules, which are designed to prevent any concerted practice that could result, for example, in excessive prices being set.

2. Study on interconnection charges between fixed and mobile networks

The purpose of the Commission Recommendation of 8 January 1998 on interconnection ((OJ L 73, 12.3.1998. )) was to provide the national regulatory authorities with information on best practice in setting interconnection charges and in accounting. However, it applies only to calls to fixed networks. In practice, those authorities are responsible for ensuring that the fixed network operators' interconnection charges are transparent and cost-oriented.

The ONP Directive does not lay down any such obligations for interconnection from a fixed to a mobile network, except for mobile-telephone operators who are considered individually to have a significant market share of the interconnection market as a whole. However, such operators are not expected to appear on the market in the short term. Consequently, there are no plans at present to conduct a study on interconnection to mobile networks with the aim of establishing 'best current practice'.

However, the Commission is closely monitoring interconnection charges between mobile and fixed networks. The third implementation report of 18 February 1998 ((COM (98) 80 final. )) gives an overview of interconnection charges between fixed-network and mobile-telephone operators in all Member States.

In this connection, the Commission has also embarked on a survey that examines, in the light of the competition rules contained in the EC Treaty, both call prices between fixed and mobile networks and the corresponding interconnection charges in all Member States. It requested information from fixed-network and mobile-telephone operators in all Member States, in order to obtain an overview of the various interconnection charges between fixed and mobile networks and of the consumer prices for the corresponding calls. The replies were to be sent to the Commission by the end of February, so that an initial analysis might be available at the end of April.