Ofcom cut mobile termination charges

15 March 2011

"What are you wearing?"

For once, mobile phone operators will be the ones muttering swear words under their breath this morning, as Ofcom have decided to tell them off for continually shafting us plebs.

Basically, the watchdog has ruled that mobile operators will have to lower the cost of their termination rates, the amount they charge rivals to connect calls to their network.

Charges are currently around 4.18p a minute, but Ofcom have said that this needs to drop to 2.66p by the end of 2011, with a further drop to 0.69p by 2015.

Presumably, the costs will rise elsewhere as mobile companies try to recuperate some revenue. And at the moment, these charges account for something in the region of 10% and 15% of their revenues. They'll be really, really irked by all this.

It is likely that operators stop giving out free phones with contracts, which could dent the smartphone market considerably.

TOPICS:   Technology   Mobile   Economy


  • Tim
    The "free" (aka not really free at all) phone contracts will probably stay. That's the key hook for gullible punters who think they are really getting something for nothing. They'll just raise fees on other services. e.g. higher data charges, reduce the inclusive bundles, charge more for 0845 numbers, charge more for non-EU calls and roaming, increase minimum contract period and/or drop those rolling monthly contracts with no tie in, etc. That said, as operators in the UK are starting to share networks the termination charges may go away, but only if you call between those who share the same network.
  • Bill B.
    It's not really going to bring prices down though. For every minute of calls going out that costs your network less, there's an equal minute coming in which brings them less revenue. So it's swings and roundabouts people, there will be less cash in the mobile money merry-go-round, but the net effects will be the same. This campaign was founded by 3 and BT, cos it benefits them the most. Not the consumer.

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