Ofcom Pledges Much Lower Termination Costs

Telecoms watchdog Ofcom will oversee the gradual decrease over the next few years of calls from landlines to mobile phones as it wants to reduce the so-called mobile termination rates.

The mobile termination rates (MTR) will have to go down from the current 4.3p to a mere 0.5p by 2014, leaving the consumer with smaller bill and significantly boosting competition from nimbler players like 3 Networks.

The latter, in conjunction with BT, launched a website called Terminate the rate which aimed at gathering support to decrease the rate, something that was finally ratified by Ofcom.

The MTR will drop to 2.5p by April 2011, then 1.5p a year later, 0.9p by the following April and finally 0.5p by April 2014. Terminate the rate had gathered nearly 136,000 signatures so far and enlisted 65 partners including Age concern and Moneysupermarket.com since its launch in November 2009.

Arguably, the only ones not enthused by the news are the big mobile phone operators like O2 or Orange which could be losing tens of millions of pounds worth of revenues every month and face another financially disastrous setback after the European Commission imposed a number of limitations how much they can charge for a number of services.

Our Comments

In other news, Ofcom has promised to force the mobile phone operators to share PAC numbers within 24 hours to allow customers to move to other networks as quickly and seamlessly as possible. Still some are already saying that it is too little too late and that the savings won't be as big as one can expect.

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