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    Moderator thelostone's Avatar
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    Mobile phone firms told to halve call charges as watchdog prepares call for ?1billion

    Mobile phone users could be in line for cheaper bills after it emerged the industry regulator will order operators to slash charges for receiving calls from rival networks.

    When a customer calls a person on a different network, their own operator gets charged by the other company for carrying the call.

    This fee is credited with artificially inflating the cost of telephone bills for consumers.
    But a new report from media regulator Ofcom is expected to recommend that current so-called 'termination rates' are halved from 2011.
    Mobile phone firms like T Mobile may be ordered to slash their call charges, costing the industry tens of billions of pounds in revenue
    The new ruling, which will set rates from next year to 2015, is understood to reduce these charges from 4p per minute to a maximum of 2p.

    The report, expected this week, would mean mobile firms cutting call charges by at least ?1billion a year. This is half of the ?2billion a year the operators are thought to charge each other per year in connection fees.

    Even though these charges have dropped in recent years, there are fears they are still contributing to excessive profits.

    The Ofcom (Office of Communication) logo on the front of its headquarters in London


    Consumer groups hope the order will lead to cheaper bills, but there are also fears that mobile phone companies will simply hike up other prices to offset the losses.

    Big operators including 02 and Vodafone will have to cut the basic cost of calls, but may accompany this with higher monthly subscription charges and an end to cheap pre-pay deals, affecting the least well-off.

    The move would benefit companies like BT, which gets hit with massive costs in connecting calls from landlines to mobile phones.

    BT has estimated that the extra cost of ringing mobiles from landlines is ?750million a year.

    John Petter, head of BT's consumer arm, told the Sunday Times it would 'pass the benefit' of any reduction in termination rates to its customers.

    One option in Ofcom's consultation had been to axe termination rates completely. But Ofcom is now expected to halve them instead.

    Ofcom chief executive Ed Richards said last year: 'The role of termination rates in mobile services has attracted enormous controversy. That is why we are determined to examine them from first principles.'

    There has already been a 'Terminate the Rate' campaign by BT and the mobile network 3.

    In previous years, mobile phone networks were given freedom to inflate termination charges to recoup the cost of building a mobile mast network.

    An EU ruling that cut the price of roaming charges, when people use their phones abroad, was also blamed for increasing termination rates.

    It has been suggested that the termination rates actually account for up to 80 per cent of the cost of a call to a mobile.

    Experts have claimed if the charges are abolished the total cost of a mobile call could be cut to 1p or less a minute.

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    Elite Member Diablo13's Avatar
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    Re: Mobile phone firms told to halve call charges as watchdog prepares call for ?1bil

    Why can't they work like bank atm's and not charge anything for using each others hardware?
    After all EXCHANGE is no robbery. Hidden Content
    For all the costs BT says it incurs connecting to mobiles, it must cost other companies to connect 02's calls as well?
    Still at least this is a step in the right direction, so long as there isn't a massive hike in all call charges to make up for it!

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