The termination rate charged by mobile operators in the UK will fall 80% to 0.69p per minute over the next four years, regulator Ofcom announced today.
According to Ofcom, the move encourages increased competition for the benefit of consumers, without…
The termination rate charged by mobile operators in the UK will fall 80% to 0.69p per minute over the next four years, regulator Ofcom announced today.
According to Ofcom, the move encourages increased competition for the benefit of consumers, without having any material impact on investment.
This is because mobile sector investment is increasingly driven by the soaring demand for data services, smartphones and mobile broadband, explained Ofcom in a statement.
Under the guidelines, the fee operators charge rivals for handling calls from their networks will be slashed from 4.3p per minute to 2.66p per minute on 1 April 2011. By 2014, this fee will be phased to just 0.69p per minute.
Kevin Russell, CEO of UK mobile operator 3, welcomed the move as a step forward during the Westminster eForum conference in London today.
3, together with UK fixed-lined incumbent BT, is behind a campaign group called ‘Terminate the Rate’, which had lobbied to reduce the fee arguing it would increase competition for consumers.
However, mobile operator Vodafone, 3’s larger UK rival, warned the rate cut will ultimately be unfavourable for consumers.
“We are really disappointed that Ofcom has ignored the evidence that termination rate cuts will mean higher costs for pre-pay customers especially at a time when money is tight for many families,” said a spokeswoman for Vodafone.
“We are studying Ofcom’s decision and considering all of our options.”
