Mobile phone calls should become cheaper in Malta under a new initiative being taken by the European Commission, with the cost going down by between 1.5c and 3c per minute by 2012.

The Commission has called on national regulators to ensure that what are known as mobile call termination rates (MTRs) are based only on the real costs to establish the connection.

Termination rates are the wholesale fees charged by operators to connect the call from another operator's network. These charges are then passed on to the consumer.

In Malta, for instance, Go Mobile charges a termination rate each time it gets a call from a Vodafone or Melita network subscriber and vice versa.

The Commission considers the rates in Malta to be higher than the actual costs. In fact, the average termination rate charged by Maltese networks, and eventually passed on in the monthly bill to users, stood at 9.5c last year, higher than the EU average.

According to the Commission, mobile termination rates varied widely across the EU, from 2c per minute in Cyprus to 15c in Bulgaria, averaging at 8.55c for the EU. The rates are also typically 10 times higher than fixed termination rates.

The EU executive says that higher mobile termination rates make it harder for fixed and small mobile operators to compete with large ones.

Brussels warned that these divergences, and differing regulatory approaches, undermine the EU single market and Europe's competitiveness.

"This is not in line with the increasing convergence between fixed and mobile telephony and can lead to serious distortions of competition between member states and operators," EU Telecoms Commissioner Viviane Reding said.

The Commission estimated that eliminating price distortions between phone operators across the EU will lower consumer prices for voice calls within and between member states, saving customers at least €2 billion in 2009-2012.