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A Primer on Mobile Termination Rates notes that while mobile telephone subscribers surpassed fixed line subscribers globally in 2002, mobile usage significantly lags fixed line usage. The main reason is the high price of mobile calls which are often caused by high mobile termination rates (MTRs, the cost per minute of terminating a call on a mobile network). There is compelling evidence that mobile users in countries with low termination rates or that charge the receiving party for the call (known as Receiving Party Pays, RPP), spend more time talking on their phones. For example, users in the United States, where mobile operators use RPP, spend almost 600 minutes a month speaking on their mobile phones whereas users in the European Union, where the calling party is charged for the call (known as Calling Party Pays or CPP) use their mobile service an average of only 142 minutes a month.
The report finds that the average MTR in the world was US$0.142 at the beginning of 2005. MTRs among countries that have announced phased reductions are forecast to fall below US$0.109 per minute by 2007, a decline of 19% a year. There is significant variation in MTRs around the world, with the Asian region having the lowest at US$0.048 per minute:
MTR by Region, 2005, US$
The report provides regulators, policy makers, operators, researchers and others with an overview of MTR concepts. It explains the difference between RPP and CPP, providing examples of different penetration rates and usage patterns under the two systems. The report examines asymmetric MTRs, such as different rates for different operators in the same country or different MTRs depending on the originating network such as another mobile, a fixed network or an international call. It features 5 tables and 20 charts providing a wealth of data on mobile termination rates and trends. In addition, regional benchmarks are provided for 2005. It also includes a summary table of mobile market indicators including penetration, retail pricing, competition index, minutes of use and average revenue per user for 40 major economies.
|3||Mobile termination rate structure|
|3.1.1||Different rates for mobile operators|
|3.1.2||Different rates for call origination|
|3.2||International mobile surcharges|
|4.3||Regulatory intervention in action|
|4.3.4||Latin America and the Caribbean|
|5||Determining appropriate MTRs|
|5.2||Volume retail packages and on net pricing|
|6||Revenue or Cost?|
|7||Mobile market indicators, major economies, 2004|
|8||Mobile Termination Rates|
|9||Regional MTR Benchmarks|
|10||Mobile surcharges and spot market rates, 2005|