We're paying too much for mobile calls – official

Competition Commissioner says termination charges need to be cut

The Competition Commissioner has told mobile operators they are charging to much for connecting calls from other networks, recommending that prices be capped.

The rebuke comes in a letter from the Commissioner to the UK's four existing mobile operators (Vodafone, Orange, O2 and T-Mobile) concerning termination charges.

Termination charges relate to the fees service providers charge for routing calls from other operators through their networks. They also apply to calls made from landline phones.

The Commissioner, whose letter details his preliminary thoughts on the subject, believes that action to force prices down may be needed because termination charges are not subject to the competitive pressures faced by other parts of the mobile market.

A final report by the Commissioner on termination charges is not expected until next January.

Last year, Oftel proposed that call termination charges should be reduced by 12 per cent less than the rate of inflation for the next four years. Mobile operators objected to the scheme and in January the Competition Commission was asked to adjudicate.

Last month, Orange criticised Oftel intervention in one of the few profitable areas of its business. It warned it might be forced to scale back investment in 3G, which promises high-speed Internet access from mobile phones, if its profits are cut. ®

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