OPTA encourages price reductions for calls from landline to mobile phones

OPTA has announced a number of measures after noting that the charges for calls from fixed to mobile phones are excessively high.

OPTA is planning to designate KPN and Libertel as telecommunications providers with significant market power in the mobile phone market. Such a designation is one which OPTA can accord to any market player that has a market share in excess of 25%. OPTA has decided in favour of an accelerated procedure for such designation, because the market has itself failed to reduce the charges levied for calls from landline to mobile phones sufficiently. By according this designation to the two providers, OPTA believes that it may be able to reduce tariffs further without intervening directly.

Once such a designation has been finalised, KPN and Libertel will no longer be allowed to charge discriminatory tariffs for transmitting calls to their mobile phone subscribers. At present calls from fixed to mobile phones are far more expensive than in the other direction. As such, landline subscribers are subsidising mobile callers. OPTA does not think it is a good idea to fund competition in the mobile market with the aid of cross-subsidies. In most other EU countries the major market parties have long been designated as parties holding significant market power. It is only now that the Netherlands will be catching up with them.

KPN has presented a proposal to OPTA to raise end-user tariffs for calls to mobile phones abroad by 47 cents (excluding VAT). OPTA does not agree with this. It believes that Dutch consumers would be subsidising a number of foreign providers as a result of this increase. One of OPTA’s duties is to protect Dutch consumers against unfair tariffs. Moreover, call tariffs to mobile phones abroad are not sufficiently cost-oriented. Because a large number of international agreements are involved, OPTA has also been in touch with the European Commission’s Directorate-General for Competition about this tariff increase.