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Watchdog proposes network-to-network call cost cut

Termination rates must be slashed, says Ofcom

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Ofcom has told telcos they should charge each other less money for running calls from one network to another.

These so-called 'termination rates' will fall from 4.3p per minute today to 0.5p per minute in 2015, if Ofcom gets its way.

That's a significant reduction, though there's nothing but market forces to make telcos pass the reduction on to consumers.

Still, BT, for one, has come forward to welcome the proposal. It said: "Reductions in mobile termination rates are good for businesses and consumers alike, and BT will make sure its customers see the benefit with cheaper calls to mobiles, including fixed price all-you-can-eat packages that take the worry out calling mobile phones."

That's a lead other providers will have to follow.

At this point, the reduction is merely Ofcom's suggestion - a proposal to which the likes of BT, Virgin Media, Vodafone, O2 and Orange can respond. Members of the public may also have their say. Assuming no one comes up with a radical reason why the reduction shouldn't happen, it will be introduced in the 2011-2015 timeframe. ®

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