Dutch Proposal Mandating Net Neutrality Means Mobile Consumers Can Use Vonage VoIP At No Extra Cost

A new proposal to modify Dutch laws, which would result in mobile phone service providers to charge additional fees to consumers who use VoIP services such as Vonage VoIP or web based instant messaging may deal a large blow to incumbent Royal KPN, which has faced an onslaught because of the growing popularity of such applications.

Maxime Verhagen, the Netherlands economic minister is proposing to change his countries telecommunications law, because whilst the government believes it is perfectly fine for mobile phone and internet service providers to charge higher for faster speeds and bigger data limits, it also feels that additional charges for voice of internet protocol services such as Vonage VoIP are unreasonable.

The ministry says it will examine the existing law and propose changes, which it says will have to be approved by parliament in the following weeks. The proposal should it be adopted means that the Netherlands would be amongst the first countries in the world to statutorily mandate net neutrality.

The changes to telecommunications laws in the fifth largest economy of the Eurozone will have a significant impact on incumbent telco and form state owned monopoly KPN, which is trying to raise its prices at a time when revenue from mobile phone services declined 8.1% during the quarter, a fall which the company blames on the growing use of VoIP services such as Vonage VoIP and Skype, as well as WhatsApp instead of traditional text messages.

KPN controls approximately 49% of the Telecom market in the Netherlands, and in response to falling revenue, says it wants to charge higher prices for VoIP, but not for WhatsApp. The company planned the move after issuing a profit warning in April.

Vodafone, which controls 27% of the market also want to impose additional fees for customers using Vonage VoIP or Skype on their smartphones, whilst T-Mobile owned by German incumbent Deutsche Telekom AG and is the smallest player in the market with 24 per cent market share prohibits its customers altogether from using such services under its terms and conditions.

All three mobile network providers said it was too early to comment on the proposed new law.

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