OPTA believes that the reduction of KPN’s landline-to-mobile call tariff does not go far enough yet

OPTA believes that the reduction of its tariff for landline calls to mobile phones within the Netherlands, which KPN has announced, does not go far enough. Today KPN announced that this tariff would be reduced from 90 cents to 75 cents per minute. OPTA will assess this tariff reduction in the light of the rules governing cost-orientation. Together with the Netherlands Competition Authority, OPTA also wants to ascertain whether there are grounds to investigate whether mobile phone operators have colluded to limit competition.

OPTA has constantly pleaded for a reduction of landline-to-mobile call tariffs. To this extent, OPTA feels that the tariff reduction announced by KPN is a step in the right direction. However, the regulatory authority believes that this tariff could be lowered even further. Inversely, the cost of a telephone call from a mobile phone to a fixed phone is a mere 25 cents in many cases, even though the same technology is used.

In addition, under the terms of the Telecommunications Act OPTA is required to test KPN’s new tariffs in the light of the rules governing cost-orientation. This means that any charges must be based on the actual costs incurred plus a reasonable profit margin. OPTA will not be able to approve these charges as long as this assessment has not been completed.

Apart from this, OPTA believes that there are grounds to investigate the possibility that mobile phone operators have been colluding with each other to restrict competition. OPTA has already contacted the Netherlands Competition Authority about this. Arrangements restricting competition have probably been made in relation to the level and uniformity of landline-to-mobile tariffs. The investigation will also cover the simultaneous increase in the charges levied for landline calls to mobile phones abroad, which KPN has announced. The combination of a reduction of national landline-to-mobile call tariffs and a substantial increase in the international equivalent charges could disadvantage those competing telecommunications companies which route their calls through another country.