Brussels - The European Commission on Thursday urged mobile phone companies to eliminate some 2 billion euros (2.7 billion dollars) in unnecessary costs to consumers by reducing the fees they charge them for making a call from another operator's network.

According to officials in Brussels, so-called "termination rates" should be based only on the real costs that an efficient operator incurs to establish the connection.

The European Union has the highest number of mobile phones per capita than any other economic bloc in the world. In fact, there are more mobile phones than people in Europe.

But mobile termination rates still vary widely in the EU - from 0.02 euros per minute in Cyprus to 0.15 euros per minute in Bulgaria, according to 2008 figures.

Mobile termination rates, which do not appear in a customer's bill, are also typically 10 times higher than fixed line termination rates.

As well as not reflecting real costs, officials in Brussels note that such hidden charges makes it harder for fixed and small mobile operators to compete with large mobile operators.

"At a time when many face financial difficulties, it is especially important to end bad practices and rectify market failures," said EU Competition Commissioner Neelie Kroes.

"We estimate that eliminating price distortions between phone operators across the EU will lower consumer prices for voice calls within and between Member States, saving business and household customers at least 2 billion euros in 2009-2012," Kroes said.

The commission's "recommendation" is not legally binding, meaning it is up to national regulators to push for such reductions to be implemented.

However, European operators warned that any drastic reduction of termination rates would hinder their ability to invest and meet future consumer demand.

"In 2008, revenue and investment growth in the telecoms industry have continued to shrink and reached their lowest level since 2003.

Today's recommendation risks further hindering the telecoms industry's ability to invest and develop innovative packages for customers," said Michael Bartholomew, head of the European Telecommunications Network Operators' Association (ETNO).

According to ETNO figures, EU mobile termination rates have already been reduced by 40 per cent over the past three years and are set to drop by a further 40 per cent over the next three years. (dpa)