June 20, 2014 / 4:31 PM / in 4 years

EU sets deadline for Germany to scrap mobile rate plan

* Germany given 3 months to lower mobile connection rates

* Current rates 80 percent higher than elsewhere

* Legal proceedings could follow

By Julia Fioretti

BRUSSELS, June 20 (Reuters) - The European Commission gave Germany three months to abandon its plans to hike the fees mobile operators can charge each other for connecting calls on Friday, saying they lead to rates more than 80 percent higher than in other countries.

The EU executive issued a first warning to the German telecoms regulator over its plans to raise the so-called mobile termination rates in April, but the Bundesnetzagentur (BNetzA) failed to address its concerns.

“The German regulator has calculated mobile termination rates ... in a way which differs from the Commission’s recommended approach,” the Commission said in a statement.

BNetzA has three months to convince the Commission that it will amend its tariffs. If it fails to do so, the Commission will follow up with a more formal warning, which could ultimately lead to court proceedings and fines.

Mobile termination rates across Europe average a few euro cents per minute, but operators are reluctant to see them eliminated or even lowered as their revenues decline under competition from increasingly popular internet voice and texting applications.

The Commission says Germany’s plans would clash with the aim of fostering competition among operators and creating a telecoms single market. Calls across networks can only be connected by the operator on the receiving end, meaning that operator has a de facto monopoly on prices, according to the Commission.

EU telecoms commissioner Neelie Kroes has put forward a package to overhaul the struggling telecoms sector and create a single market, which includes forcing mobile operators to eliminate roaming fees charged while using mobile phones abroad.

Industry players, such as Deutsche Telekom, have complained it will eat further into their revenues and stop them investing in higher speed internet infrastructure, an area in which Europe lags behind countries such as South Korea and the United States.

The European Parliament in April voted to end mobile phone roaming fees by 2016, but the proposal still requires agreement from member states. (Editing by Mark Potter)

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