Vodafone has hit out at plans for telecoms reform announced by European Commissioner, Viviane Reding. The mobile operator claims that plans to slash mobile termination rates will force 40 million Europeans to stop using their phones.
Under the current system, telecoms operators make 15% to 20% of their revenue from termination rates, which are the charges the companies levy on each other for connecting calls to wireless networks.
Reding has announced plans to adopt a similar system to the US, where mobile users pay to make and receive calls, and there are no termination rates. The rates are currently about eight € cents per minute across the European Union, and Reding plans to cut them to between one and two cents per minute by 2012.
Vodafone claims that cutting termination rates will force operators to raise retail charges to compensate.
The mobile operator adds increased retail charges will be felt by the less well-off customers with cheap pay-as-you-go deals because they are more likely to receive incoming calls that require termination rates.