(Refiles to edit headline and make clear price fall from April2012, in 5th para)
MADRID, July 1 (Reuters) - Spain's telecoms watchdog cut thefees mobile operators can charge each other for connecting callson Monday, which is likely to lower customer phone bills in anation battling recession.
Competition in the Spanish market has heated up in recentmonths for operators Telefonica, Vodafone,Orange and Yoigo as they struggle to cling on tocustomers in the country, where 27 percent of the workforce isunemployed.
When a customer of one operator calls someone who has adifferent provider, the second network charges the first a feefor connecting and terminating the call on its network - knownas a termination fee.
The European Union is pushing telecom regulators across thebloc, who set limits on these rates, to force networks to lowerthem in an attempt to cut bills for consumers, though progressis at different stages across countries.
Spanish regulator the CMT said mobile termination rateswould drop by about 75 percent to 1.09 cents a minute from 4cents in April 2012, when the process of lowering rates began.For no.4 player Yoigo, the price will fall to 1.09cents from 4.98 cents in April last year.
The change in Spain means its rates are below the Europeanaverage of 2.53 cents a minute, according to the CMT.
The European Commission, which is concerned by disparityacross EU member states, last week asked Germany to withdrawplans that could result in termination rates more than 80percent higher than in most EU states.
The CMT said although operators in Spain tend to chargeusers the same price for making calls across networks, thetermination rate reduction paired with the highly competitivemarket was likely to bring prices down.
"Although companies are not obliged to reduce prices forend-users as a result of the wholesale rate cuts put in place bythe regulator, regulatory action combined with an improvement incompetitive conditions in the market (fewer entry barriers andmore operators) has the effect of bringing end prices down inthe medium term," the CMT said in a statement.
The CMT did not elaborate on what "medium term" meant, butin the past reductions in termination fees have resulted incheaper prices within a matter of months. For example, theaverage termination rate fell to 3.6 cents a minute in 2012 from4.6 cents in 2011, and the average call rate also dropped to11.2 cents from 12.6 cents.
In April, all four Spanish mobile operators lost thousandsof clients in the increasingly cut-throat competitiveenvironment. ($1 = 0.7693 euros) (Reporting by Clare Kane; Editing by Pravin Char)