ImCal
20th May 2009, 10:07
Cost of mobile phone calls could be slashed as watchdog considers cross-network price limits
The cost of mobile phone calls could soon fall after Ofcom said it was considering regulating call price limits across operator networks, it has emerged.
The telecoms watchdog said it was looking into regulating the charges which operators make to connect calls to different user's networks.
So, for example, Orange users currently charged extra for calling friends on Vodafone could expect to pay the same as if they were calling someone on their own network.
A spokeswoman said Ofcom was considering 'radical alternatives' to the current agreement, which expires in 2011, in a bid to cut call costs for phone users.
She said the move would also give mobile operators greater flexibility to design competitive call packages which would be passed onto consumers.
Mobile phone users could soon be paying less to send messages and call other networks under a proposal by telecoms watchdog Ofcom
The move forms part of an Ofcom consultation which is looking at how such would affect customers in a rapidly changing market.
The consultation sets out six options for the future of the charges and could save European mobile phone users billions of pounds over the next four years if adopted.
These range from maintaining the current system, which has seen rates come down year on year, to one where the customer's own network is responsible for all phone call costs.
Most of the options are likely to reduce the current rates but the possible outcome of removing termination regulation from mobile operators is uncertain, Ofcom said.
Higher mobile termination rates make it more difficult for fixed and small mobile operators to compete with larger mobile operators.
Ed Richards, the organisation's chief executive, said the role of termination rates in mobile services has attracted enormous controversy and Ofcome was examining this issue.
'This consultation gives consumers and industry an opportunity to debate the fundamental questions,' he said.
Earlier this month, the European Commission (EC) issued guidance which said national level rates should be based only on the real costs an efficient operator incurs to establish the connection.
But the Ofcom spokeswoman said: 'At this stage, we think it worthwhile to consider the merits of alternative approaches (in terms of the impact on customers), as part of the wide policy debate.'
The six possible approaches outlined by Ofcom are:
Deregulation - the removal of all termination charges from mobile operators;
Keeping the system broadly as it is today;
Revising the charges with no allowance for the recovery of common costs, broadly the model recommended by the EC;
Setting the structure of the charges based on the capacity required for termination;
Setting mobile charges to match the rate set for fixed operators;
Effectively setting termination charges at zero, as in the so-called bill-and-keep system used in the US.
The cost of mobile phone calls could soon fall after Ofcom said it was considering regulating call price limits across operator networks, it has emerged.
The telecoms watchdog said it was looking into regulating the charges which operators make to connect calls to different user's networks.
So, for example, Orange users currently charged extra for calling friends on Vodafone could expect to pay the same as if they were calling someone on their own network.
A spokeswoman said Ofcom was considering 'radical alternatives' to the current agreement, which expires in 2011, in a bid to cut call costs for phone users.
She said the move would also give mobile operators greater flexibility to design competitive call packages which would be passed onto consumers.
Mobile phone users could soon be paying less to send messages and call other networks under a proposal by telecoms watchdog Ofcom
The move forms part of an Ofcom consultation which is looking at how such would affect customers in a rapidly changing market.
The consultation sets out six options for the future of the charges and could save European mobile phone users billions of pounds over the next four years if adopted.
These range from maintaining the current system, which has seen rates come down year on year, to one where the customer's own network is responsible for all phone call costs.
Most of the options are likely to reduce the current rates but the possible outcome of removing termination regulation from mobile operators is uncertain, Ofcom said.
Higher mobile termination rates make it more difficult for fixed and small mobile operators to compete with larger mobile operators.
Ed Richards, the organisation's chief executive, said the role of termination rates in mobile services has attracted enormous controversy and Ofcome was examining this issue.
'This consultation gives consumers and industry an opportunity to debate the fundamental questions,' he said.
Earlier this month, the European Commission (EC) issued guidance which said national level rates should be based only on the real costs an efficient operator incurs to establish the connection.
But the Ofcom spokeswoman said: 'At this stage, we think it worthwhile to consider the merits of alternative approaches (in terms of the impact on customers), as part of the wide policy debate.'
The six possible approaches outlined by Ofcom are:
Deregulation - the removal of all termination charges from mobile operators;
Keeping the system broadly as it is today;
Revising the charges with no allowance for the recovery of common costs, broadly the model recommended by the EC;
Setting the structure of the charges based on the capacity required for termination;
Setting mobile charges to match the rate set for fixed operators;
Effectively setting termination charges at zero, as in the so-called bill-and-keep system used in the US.