Ofcom pushes for further cuts to mobile calls

Telecoms

by Michael Moore| 05 June 2014

Watchdog wants to slash mobile termination rates to 0.5p a minute.

Ofcom has announced new regulations that it says will make the cost of making a phone call cheaper than ever for consumers.

As part of its ongoing campaign to lower the wholesale costs of phone calls, the UK's telecoms industry regulator has said it is looking to further reduce the cost of mobile termination rates (MTR), which operators charge when connecting customers to a network different to their own.

Ofcom conducted its last review of the MTR market in 2011, imposing a control on the rates charged by the four largest network operators, who use the charges to setting their call costs.

The watchdog has said that introducing more efficient mobile technologies, including 4G networks, have reduced costs for operators and MTR should reflect this in order for consumers to benefit.

Since 2011, MTR have fallen by around 80%, from four pence per minute to 0.8 pence per minute, and the latest proposals would see rates fall again to just under 0.5 pence per minute.

Ofcom is proposing a new charge control for all operators which would see termination rates fall further to less than half a penny per minute by April 2017 in real terms. The consultation closes on 13 August, with Ofcom expecting to publish its final decisions by March 2015.

"Consumers in the UK benefit from a thriving competitive market, and mobile calls have never been cheaper," says Brian Potterill, Ofcom competition policy director.

"The average cost of a call bundle has fallen from £40 to around £13 in real terms over the last ten years. We want to ensure mobile users continue to benefit from competition, which will deliver affordable services in the years ahead."

Last week, Ofcom said it was considering offering up the 700MHz spectrum currently used for Freeview signals over to mobile broadband services, as it looks to ensure that the UK makes the most of its spectrum resources.

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