Mobile phone companies will be ordered to reduce call charges by at least GBP1 billion by telecoms regulator Ofcom this week, according to newspaper reports.
The industry watchdog is set to release a report recommending that mobile phone operators drastically lower the cost of phone calls between different networks, known as “mobile termination rates”.
Despie falling prices, mobile operators still charge one another around GBP2 billion per year to connect calls from one network to another.
In its report, Ofcom is expected to set these termination rates at a maximum of 2p a minute – half the current rate – starting from 2011. The cuts should result in mobile users saving at least GBP1 billion.
The report recommendations are unlikely to be welcomed by mobile phone firms such as Vodafone and O2 . Both companies could move to offset their losses by increasing other charges to their customers.
However, the cut in call charges would be of huge benefit to companies such as 3 and BT . Mobile network 3 states that it is currently unjustly hit by the cost of connecting its smaller number of phone customers to its larger competitors’ networks, while BT also gets hit with heavy charges for connecting landlines with mobile calls .
