The European Commission blocked plans by Germany on Friday to raise the fees alternative telecommunications operators charge each other to connect fixed-line phone calls.
The German telecoms regulator (BNetzA) proposed raising these call termination fees to three times the average rates in many parts of Europe to compensate for steadily declining revenues in the sector. There are over 50 alternative operators in Germany.
But the Commission, which opposed similar fee proposals for Deutsche Telekom (Bonn, Germany) early this year, is seeking to harmonize such rates across Europe.
"It is important for building up a real single market that both operators and consumers face termination rates in Germany that are in line with those in other EU Member States," the EU Commissioner for telecoms Neelie Kroes said on Friday.
The commission did not name any alternative operators in its decision but there are over 50 in the German market including EWE Tel GmbH and 1&1 Internet AG.
The German regulator had said it planned to raise rates to 0.0036 euros per minute at peak times and 0.0025 euros per minute at off-peak times.
These figures are the same as the rates BNetzA proposed for Deutsche Telekom.
Operators following the Commission's stance charge on average 0.001 euros per minute.
The German regulator and the EU will now negotiate for a three-month period to seek a compromise, the Commission said. In the meantime implementation of the proposed rates is suspended.
(Reporting By Claire Davenport; Editing by Ruth Pitchford)