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Ofcom orders mobile phone charge cut

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The cost of mobile phone calls could fall after communications regulator Ofcom ordered the UK's four major operators to cut termination charges.

Today's announcement - which apply to mobile network operators' wholesale charges for connecting incoming calls to their networks - ends a regulatory saga that has dragged on for six years. Following a series of investigations Ofcom has concluded that direct controls should be imposed on the charges to operators for terminating calls on the 2G mobile networks of Vodafone, O2, Orange and T-Mobile.

Vodafone and O2 must reduce average termination charges from around 8p a minute to 5.63p a minute, while T-Mobile and Orange must cut their charges from 9.5p to 6.31p a minute. All four must implement the cuts by March 2005.

Said Ofcom chief exec Stephen Carter: "Today's decision closes a lengthy process, where we have concluded that price controls are currently a necessary market mechanism."

A spokesman for Vodafone said Ofcom's ruling was "in line with expectations". And although Orange welcomed "an end to the uncertainty that this lengthy process has created" it challenged Ofcom's conclusion that "detailed regulation of mobile termination rates is necessary".

"Looking forward we believe that the issue of mobile call termination should be ring fenced. Ofcom must recognise that the rest of the mobile market is highly competitive. There is no need or justification for further regulatory intervention in this market." ®

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