Mobile phone firms told to slash charges

1st Apr 2010 07:13

Britain's four mobile phone groups have been told to slash charges for calls between different networks and between land lines and mobiles over the next four years by telecoms regulator Ofcom.Vodafone, Orange, O2 and 3UK currently charge either 4.6p or 4.3p a minute for calls to another network - the termination charge. This will fall to 0.5p by 2015 under today's proposals.The reduction will be in stages, but the heaviest cut, a 2.1p or 1.8p per call reduction depending on the network, is scheduled for this year. After that the reductions per year are 1p, 0.6p and 0.4p.The regulator said the proposals would balance out across the mobile industry butthe payments made by fixed operators to mobile operators for terminating calls will fall. Ofcom expects these reductions to be passed on to consumers through competition."Lower termination rates will enable cheaper calls to mobiles for the32.7m UK homes and businesses with a landline. The proposals will also mean that both landline and mobile operators have more flexibility in designing competitive call packages, promoting competition for the benefit of consumers, " Ofcom said.It also wants to change the way the termination charges are controlled because of the upsurge in competition from internet providers.From 2011, the four national groups can only apportion costs that are incurred directly from terminating calls, rather than additional so-called common costs, such overheads.Other mobile providers can set their own termination rate, such as smaller or new entrant operators. These rates should be set on a fair and reasonable basis, the regulator said.Ofcom also announced that, subject to the outcome of a further short consultation, consumers will be able to transfer their existing mobile phone number to a new provider in one working day rather than the current two days.