July 15, 2014 / 3:10 PM / in 4 years

Lithuania bows to EU over plans to raise telecom fees

* EU warned Lithuania over fixed call rates on Monday

* Lithuania to submit revised proposal in coming months

BRUSSELS, July 15 (Reuters) - Lithuania has withdrawn plans to raise fees fixed telecoms operators can charge each other for connecting calls, bowing to pressure from the European Commission which had begun an investigation into its proposal.

The Commission has previously criticised Lithuania’s plans to raise so-called fixed termination rates and issued a formal warning to the Baltic state on Monday, saying the plans would lead to significantly higher call rates than in other countries.

Following the warning, Lithuania on Tuesday withdrew its proposal, a European Commission official said.

The Lithuanian telecoms regulator has to submit a revised proposal in the coming months. If it fails to bring the measures into line with EU law, the Commission can ultimately start court proceedings.

“The Commission is particularly concerned that, if the new plan is introduced, fixed call termination rates in Lithuania will remain at a much higher level compared to the other EU Member States,” the Commission said.

The so-called fixed termination rates would result in higher prices for both fixed and mobile phone users in Lithuania, as well as for people calling from abroad, it said.

The Commission has taking steps to lower both fixed and mobile phone rates for Europeans, although industry players complain it will eat into their revenues and hinder much-needed investment in higher speed networks.

Germany was the last country to be issued a formal warning over the rates mobile operators could charge each other, and now has three months to change its proposals.

EU telecoms commissioner Neelie Kroes has put forward a proposal to overhaul Europe’s struggling telecoms sector, which includes forcing mobile operators to eliminate roaming fees charged while using mobile phones abroad.

The proposal was voted on by the European Parliament in April and now needs the blessing of national governments.

Calls across networks can only be connected by the operator on the receiving end, meaning that operator has significant sway over the prices it can charge its competitors. (Reporting by Julia Fioretti. Editing by Jane Merriman)

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