Cap on calls announced by watchdog
Ofcom has announced a reduction in the rates that mobile operators can charge to connect to their networks - a victory for the campaign entitled Terminate the Rate.
The move means that, from 1 April, the big four UK mobile networks (O2, Vodafone, Everything Everywhere and Three) will only be able to charge 2.6p per minute, and not the 4p they had previously. Ofcom has also set guidelines for the rate to fall by a total of 80 per cent over the next four years, down to a low of 0.69p per minute by 2014.
The European Commission had recommended that the 0.69p figure should have been met in half the time of Ofcom's proposals (and also talked up a 0.5p cap), although consumer utilities company uSwitch still welcomed the move.
"This is a clear victory against the bully boys," said Ernest Doku, technology expert at uSwitch.
"While termination rates have served as a tidy revenue for the big networks, the minnows in the market such as Three have struggled to make headway. There’s no doubt that this news will really give a boost to competition in the mobile market.????
It is hoped that the savings will be passed on to users, and mobile bills fall as a result. However, it may not be as simple as that.
"Network rates are going to be virtually halved almost immediately, making it in theory much cheaper to call a mobile. But whether consumers will see these rate cuts as quickly as the networks make them is another matter," said Doku.
"The good news is that BT is already planning to include calls to mobiles in a new ‘all you can eat’ tariff and we call on its competitors such as Virgin Media and TalkTalk to also ring in the changes.
"In theory, mobile bills should also come down - but in reality, the networks may look to introduce charges elsewhere to make up for the loss in income."
A Terminate the Rate spokesman praised the decision though, and stated that it will be the consumer who would ultimately benefit.
He said: "Ofcom has acknowledged that lower mobile termination rates are better for consumers and committed to reducing them to less than a penny, which raises the question: why can’t those benefits be realised sooner?? In the long term, this is a win for consumers: cutting mobile termination rates supports competition and better deals for all that call mobiles."
You can read the full Ofcom statement on the watchdog's website.
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Tags: Phones Ofcom Mobile phones
Terminate the Rate Ofcom victory should mean cheaper calls originally appeared on http://www.pocket-lint.com on Tue, 15 Mar 2011 10:40:00 +0000
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