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Mobile calls to get cheaper as Ofcom pushes for further cost cuts

Wants to lower mobile termination rate to 0.5p per minute
Wed Jun 04 2014, 12:11
Phone call

UK TELECOMS WATCHDOG Ofcom proposed further cuts to the mobile termination rate on Wednesday, a move that ultimately could lead to cheaper phone calls.

The mobile termination rate, which is the cost incurred when people call a number on a different network, has already fallen drastically over the past few years, and presently is set at 0.8p per minute, a far cry from the 25p rate in 1995.

However, Ofcom wants to slash this cost even further, and said that under its new plans, the cost will drop to just half a penny per minute by April 2017.

The mobile termination rate comes into consideration when an operator sets its prices for customers, so if Ofcom gets its way, it likely will pave the way for cheaper phone calls and mobile price plans. "The new charge controls are designed to ensure that the charges levied by operators reflect these lower costs," Ofcom said.

These rates, Ofcom said, will affect all of the major UK mobile operators, including EE, O2, Three and Vodafone. However, Ofcom noted that it shouldn't have too much impact on the mobile networks, as they all likely will launch 4G voice services in the near future.

Ofcom competition policy director Brian Potterill said, "Consumers in the UK benefit from a thriving competitive market, and mobile calls have never been cheaper. The average cost of a call bundle has fallen from £40 to around £13 in real terms over the last 10 years.

"We want to ensure mobile users continue to benefit from competition, which will deliver affordable services in the years ahead."

Ofcom said it will finalise its plans by March 2015 following a consultation period. µ


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