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Ofcom considers termination charges

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Ofcom has published an assessment of the UK's mobile industry, which is all looking rosy we are told - but it wants to hear from the public on a range of issues including whether we should pay to receive calls.

The report calls for "fresh strategic thinking" on call termination charges - the current rules expire in 2011, so Ofcom reckons now is the time to discuss whether changes are needed. The European Commission is also looking at termination charges, and its consultation ends next week.

The "Mobile Sector Assessment" isn't a recipe for more regulation; on the contrary, Ofcom claims to want less regulator involvement just as soon as it can be arranged.

The document does highlight problems with the industry - overly complex tariffs and inconsistent coverage - as well as identifying issues that might arise as the industry evolves, and asking for anyone with ideas of how to address them to drop Ofcom a line.

The full report (pdf) is a little self-congratulatory, pointing out that the mobile sector is now generating more money than fixed telephony and broadband combined, and that most punters are paying less for mobile telecommunications. Apparently one in eight UK households have dropped their fixed-line telephony completely, though not those living in the countryside, where coverage is still often limited to one operator and 3G is a rare luxury.

In general, the assessment finds competition is driving prices down and services up - 40 per cent of punters have changed networks at some point, despite the fact that only one in five could name more than one network operator when challenged.

One problem is that while contract customers have been getting bigger bundles, those on pre-paid connections are largely getting the same thing for the same price, only with the numbers changed round a bit. Given that pre-paid customers tend to be at the lower end of the economic scale that's rather unfair, though Ofcom is at a loss as to what to do about it.

The complexity of tariffs also comes under attack, with Carphone Warehouse being singled out as an example of how complex tariffs are getting. The number of lines of small print attached to a pre-paid contract is plotted on a graph that shows it increasing steadily from zero to 30 between 2000 and 2006, when they gave up and started directing people to their website instead.

All this results in 7.4 million people who don't have a mobile phone, two thirds of whom don't want one. Which is fair enough, but that makes one third who either can't get coverage or don't have a handset for some other reason.

The Joseph Rowntree Foundation reported that a mobile phone is now essential "to adequately participate in society" - so while some people don't want to actively join in, it's a concern that so many people aren't able to.

Ofcom also reckons termination fees are going to be a problem as the communications market converges. With calls originating and terminating in so many places it's becoming impossible to regulate properly, and complete deregulation is one of the options Ofcom suggests, though complete removal of the termination fee - and thus paying to receive calls - is the more likely conclusion.

Just to show they're still down with the kids Ofcom has launched a toe-curling blog to comment on the assessment, and an interactive response page for those who can't be bothered to fill out the paper form - though it seems unlikely many of the Web 2.0 crowd will be willing to wade through 166 pages before commenting.

There's an executive summary here, which you can add comments to. ®

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