Mobile operators and Ofcom go head-to-head over termination fees

20 May 2011

"Look at me on my phone!"

It is all kicking off between Ofcom (them again) and mobile phone operators with the latter going crying to the Competition Appeals Tribunal, because they're wanting higher termination rates. Apart from Three who are asking for completely the opposite.

Vodafone and Everything Everywhere are squaring up to Ofcom who want lower termination rates. It is being suggested that the regulator hasn't weighed the whole thing up, and haven't looked at the cost of spectrum, and nor have they considered the advantages of subsidising low-volume users. Meanwhile, teacher's pet, Three, are complaining that rates aren't falling quickly enough. These poor saps will invariably be ignored as they want these fees abolished entirely.

Of course, termination rates are the fee paid by the caller's network to the callee's network. That means that, in the case of Vodafone, they pay 4.18p per minute to terminate a call to O2.

These rates have been put in place by Ofcom in an attempt to prevent dominant companies blocking out competitors by charging needlessly high rates. However, Vodafone is arguing that Ofcom has their basic figures wrong, especially in regard to the billions operators have spent on 3G licences in 2000.

Seeing as it has been suggested that termination fees make up ten per cent of an operator's turnover, it is little wonder that the operators are so heated about the subject.

However, this is likely to be an incredibly length process, so don't expect to see any developments on it in the near future.

TOPICS:   Technology   Mobile   Complaints

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