Ofcom details plan for lower mobile charges

Mobile carriers may have to cut the fees they charge each other

Ofcom has detailed its proposals to force mobile operators to slash charges by 2011, to protect customers from “unduly high prices”, but operators say the move is like to have little or no impact on the cost of calls to end-users.

The regulator's scheme, first mooted in March this year, will push Vodafone, O2, Orange, and T-Mobile to reduce the wholesale fees they charge each other for fixed-line or mobile calls on their networks to 5.3p per minute.

3 will be asked to reduce its charge to 6p per minute within the same timeframe. It is currently able to charge up to 9.5p, having debuted with a third-generation (3G), rather than a second-generation (2G) GSM network in 2000, at a time when Ofcom was keen to boost competition within the mobile market.

“These rates concern what operators charge one another, not what they charge consumers. Frankly, this is about the regulator regulating,” said 3 spokesman, Ed Brewster.

O2 spokesperson David Massey said, “It is competition not regulation that delivers better deals for consumers, and that should determine what the retail market gets. Whilst O2 is disappointed that Ofcom feels the need to regulate, its proposals will at least eliminate distortions to make it more of a level playing field.”

If agreed, Ofcom’s proposed regulations could begin to come into force in April 2007. Both O2 and 3 said they would review the proposals with interest and respond in due course, but 3 suggested that any large reduction in its charges to other operators could undermine its ability to survive in the market.