In the News - Vodafone
Vodafone warns on EU proposals
Vodafone has warned that up to 40 million mobile phone users may switch off if the EU's proposals to cut termination rates by 70% by 2012 are approved. Termination rates are rates mobile operators charge each other when customers use different networks to their own whilst in Europe. Whilst the EU's proposals are aimed at reducing mobile operators 'excessive profits' and getting a fairer deal for consumers, Vodafone say that if approved, they will have to increase call charges to cover costs. Vodafone have cited a European survey of 9,000 people to ask the effect this would have. The survey estimates that 40 million people would be worse off and may switch off their mobile phones.
City analysts estimate Vodafone could lose up to £1 billion of earnings if the proposals go through. Whilst smaller mobile operators such as 3 Mobile stand to gain if the proposals are approved. 3 argue that a cut in termination rates will bring a fairer deal to consumers as increased competition will lead to cheaper calls across Europe.
The latest debate comes as mobile companies previously warned that they may end free handsets and introduce charges to receive calls if the proposals are approved (reported 'In the News' on 27 June and 17 June respectively).
(Sources: Times Online BBC.co.uk)
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02-Sep-2008 09:15:57
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