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Oftel orders cut in mobile phone charges

Operators threaten judicial review

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The UK's four mobile phone operators have been ordered to slash their charges for making calls to their mobile networks because they're overcharging punters by a whopping 40 per cent, the telecoms regulator confirmed today.

The decision comes as the Competition Commission agreed with Oftel that consumers pay too much for calls to mobile phones and that the mobile operators - O2, Orange, T-Mobile and Vodafone - must cut their termination charges for these calls.

Oftel chief, David Edmonds, said that operators were "acting against the public interest".

"Consumers are being overcharged for calls to mobile phones and the mobile operators must reduce their charges to a fair level," he said.

The decision means that operators are being ordered to cut the cost of termination charges - the fees service providers charge for routing calls from other operators through their networks - by 15 per cent before 25 July 2003.

The operators are also being ordered to reduce termination prices by as much as at least RPI (Retail Price Index) minus 14 per cent for a further three years.

It's predicted the move with save consumers £190m a year for people making calls from a fixed line to a mobile network.

BT said today that it intended to pass on the cost savings to consumers. Angus Porter, MD of BT's consumer division, said: "This is good news for BT customers. Our feedback showed that the high cost of calls to mobiles was an issue for consumers."

For example, the price of a two-minute peak rate call from BT to a Vodafone customer could come down from 40p to 35p by the end of July.

The Competition Commission believed that the price cuts would not have an adverse effect on the mobile operators' business plans.

However, the operators dispute this. Orange said it was considering requesting a judicial review to ensure that the Commission's report does not unfairly penalise mobile customers. ®

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