European mobile operators are overcharging by as much as 4.5bn euros (£2.8bn) per year for connecting calls from fixed lines to mobile phones, according to a study published today.
The study, commissioned by the European Competitive Telecommunications Association (ECTA), found that calls from fixed telephone lines to mobile phones cost 40 to 70 per cent more than it costs the mobile operator to complete the call.
According to the study, conducted by telecoms consultant Analysys, customers who call mobile phones have no choice but to pay these prices because the market is unlikely to become competitive. It is estimated that by 2006, European customers could be overcharged by 32bn euros if call volumes continue to rise.
"The study shows that competition for call termination is not likely to develop in the near or medium term. Without voluntary reductions in price by mobile operators or tighter regulation of mobile termination rates, charges are likely to remain high," said Kevin Power, chairman of the ECTA.
"As call volumes rise over the next few years and networks become more efficient, the surplus of charges over costs could double or treble under the current pricing structure," he added.
According to the ECTA, user groups complain that mobile services are overpriced and the association's members believe that mobile operators are less regulated that traditional operators.
Steve Thorpe, membership services manager at the Telecommunications Users Association (TUA), said he agrees that customers are overcharged for calls. He said it shows that the cost of mobile calls for UK customers needs to be brought down.
The study assessed 21 mobile operators across 11 European countries using long run incremental costs (LRIC) methodology. The LRIC model assesses the cost of running a network at current levels of coverage taking into account short-term growth.
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