BT triumphs in Supreme Court 0800 calls cost case

Telecoms

by Michael Moore| 10 July 2014

Ruling could lead to millions in back-dated charges being recouped.

BT is set for a multi-million pound windfall following a ruling by the UK's highest legal authority over the prices it charges mobile operators for calls to fixed-line 08 phone numbers.

The Supreme Court ruled in favour of BT's right to set the price of termination charges for mobile calls to non-geographic 08 numbers, including 0800, 0870 and 0845 calls.

The ruling could lead to a windfall worth tens of millions of pounds for BT, as it said it would seek to recover years of back-dated charges from mobile companies.

The decision means that mobile operators operating in the UK, including the likes of Vodafone, EE, Telefónica (O2), and Hutchison Whampoa (Three), will need to pay BT backdated charges on the calls.

This could ultimately run into the millions of pounds, although the amount will be decided in negotiations between the operators and BT, and will depend on how much the mobile groups are charging, and will charge, for the calls.

The ruling brings an end to years of dispute over the issue, which originally concerned BT's introduction of ladder pricing in 2009, which saw the cost termination charges to first 0800 numbers, and later 0845 and 0870 numbers, rise depending on the amount of retail charges applicable to the call.

Following objections from the mobile industry, an Ofcom ruling in 2010 found that the increase in "laddered" payments on the calls was not "fair or reasonable". However, the Supreme Court ruling found that the watchdog had taken the wrong approach in deciding that the rise in costs would be passed on to the consumer through other mobile services.

Telefónica, EE, Vodafone and Hutchinson all disputed the charges, with an EE spokesperson saying it was "both surprised and disappointed by the decision" and was considering its options, although it remained firmly of the view that BT's ladder charges are, "ultimately harmful to consumers and investment in mobile coverage."

BT said such pricing was designed to "benefit UK consumers by incentivising the mobile operators to lower their retail prices," and said it would seek to immediately recoup a "low tens of millions of pounds" from money that had been refunded to operators in 2010 following the Ofcom and appeals court rulings.

 

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