Ofcom, the UK communications regulator, is proposing to cap mobile termination charges to 5.3 pence per minute. Termination charges are the fees that a mobile operator charges another mobile operator when a customer calls someone on their network. Termination charges are blamed for the relatively high cost of calling a mobile on a different network or calling a mobile from a landline. Ofcom has decided that competition alone is not enough to reduce these charges.

Ofcom and its predecessor, Oftel, has been controlling termination charges since 2004. At that time, a review found that mobile networks were fixing the termination charges and customer had no choice but to use the mobile network that the destination number was on. Vodafone and O2 were not allowed to charge more than 5.63 pence per minute. T Mobile and Orange use a different, more expensive, spectrum and so were allowed to charge a higher rate at 6.31 pence per minute.

Termination charges account for approximately 50% of the cost to call a mobile from a BT landline. Any reduction in these charges is good news for consumers.

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This entry was posted on Thursday, September 14th, 2006 at 9:17 am and is filed under Mobile. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.