The European Commission and Germany’s telecoms regulator could be heading for a major clash over the country’s latest proposed reductions in mobile termination rates, which remain among the highest in Europe and produce millions of euros in revenue a year for Germany’s mobile operators.

Ongoing efforts by the European Commission have seen MTRs come down in a number of European countries, but the Bundesnetzagentur seems to be stubbornly sticking to a path that will only gradually reduce rates from 1.79 eurocents per minute in 2014 to 1.66 eurocents per minute in 2016 and will therefore not comply with the principles and objectives of EU telecoms rules.

“If the German regulator has done this, it is basically declaring war,” a Commission official told the Financial Times. “They know they are breaking the spirit of every agreement we have made, and possibly the law itself.”

The Commission has clashed with the German regulator before over its MTR strategy, and in April issued a call for the country to lower its rates.

“The vast majority of the EU Member States apply termination rates which are beneficial for consumers and competition. I insist that Germany complies with telecoms regulation and follows the same approach as other regulators. It is not acceptable that one regulator continues to hamper the proper functioning of the single telecom market,” said Neelie Kroes, European Commission vice president responsible for the Digital Agenda, in a statement in April.

According to a snapshot of termination rates issued by the Body of European Regulators for Electronic Communications (BEREC) in January this year, Germany’s MTRs are above average for the European Union with proposed cuts well below European guidelines. BEREC said the weighted average in January was 1.31 eurocents a minute.

In France, for example, the rates are as low as 0.8 eurocents/minute. However, rates in Luxembourg were a whopping 8.576 eurocents in January.

The Bundesnetzagentur said its proposal to reduce MTRs over the next two years was the result of an intensive review during recent weeks. It added that the proposed rates would also ensure sufficient leeway for network operators (such as Deutsche Telekom, Vodafone Germany and