MTRs: the 'invisible tax' on mobile calls
The next time you pick up your landline phone to make a mobile phone call, beware that up to 80% of what you're paying may amount to an 'invisible tax' to mobile phone operators.
Mobile Termination Rates, or "MTRs", account for up to 80% of the price per minute of a landline call to mobile phone, says a recent TimesOnline article. Critics say that it amounts to an "invisible tax" that is vastly out of proportion to what is fair. MTRs are charged when a landline call connects to a mobile operator's network, and they account for at least 4.7p of the cost of every minute of a call made to a mobile phone.
So is it a nefarious scheme to maximize their profits, or is it just another sign that the landline is endangered? Mobile operators raked up £750 million in 2008 in MTRs from allowing landline calls to mobile phones. Smaller mobile networks like 3 don't like it either, because it has to fork over every time its customers call a mobile on competitor's network. What's more, most people don't really know that these charges exist.
Ofcom plans to have MTRs down by 25% by 2011, with further reductions possible after that. BT, Britain's biggest landline company, is also calling for MTRs to be slashed to 1p or less - closer to what's charged to make a call to a landline. While they are at it, might as well bring back the rotary phone.