Ofcom's knuckles rapped over termination rates


January 23, 2009

The UK Competition Commission has ruled that Ofcom set maximum termination rates for mobile calls too high.

Termination rates are the charge mobile operators make for incoming phone calls

The ruling relates to a 2007 complaint by BT, who said that Ofcom calculated the figures for termination rates based on what the operators paid for 3G licenses, rather than what the licenses were actually worth.

The Competition Commission upheld BT’s complaint, and ruled that the average cost of terminating a mobile phone call should drop to 4.0p by 2010/11.

Ofcom had said the rate should be cut to 5.1p by 2010/11.

Industry experts estimate that the extra rate cuts will cost operators up to £250 million over the next two years.

A statement from Ofcom said the group ‘acknowledges’ the Competition Commission’s ruling.

Meanwhile, the European commissioner for telecoms, Viviane Reding, is campaigning for terminate rates to be cut further.

Reding claims that high termination rates are unjustified, and result in inflated phone bills for consumers.






 

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