Definition of Mobile Termination Rates

Mobile termination rates, or MTRs, are the costs charged by mobile operators for completing outgoing calls on its network. These rates vary tremendously throughout the world because MTRs have little regulation.

Receiving Party Pays

The United States, along with several other countries, works on a receiving party pays, or RPP, system for calls. Therefore, MTRs are very insignificant to customers when comparing phone services. With this system, incoming calls are counted against a customer's minutes or plan. Most mobile companies now offer free incoming calls, so MTRs mean nothing.

Calling Party Pays

Calling party pays, or CPP, is the system used in most other countries. With this system, customers placing calls pay a fee every time a call is placed. When this happens, the mobile company must pay MTR fees to the originating carrier if the calls are made between different subscribing companies. Companies operating this way cannot offer free incoming or outgoing calls because they are still charged the fees regardless.

Regulations

Africa and Latin America have no regulation. European countries have regulations with caps. It's hard to regulate because it's hard to determine what these actually cost. The United States, along with other countries, are working on developing a plan that would regulate these costs.

References

• RCR Wireless: Analyst Angle: The Challenges of Mobile Termination Rates
• ICT Regulation Toolkit: Mobile Termination Rates
• CNET News: What to Do about Wireless Termination Fees?