Ofcom To Regulate 3G Termination Rates

LONDON -(Dow Jones)- UK telecommunications regulator Ofcom Wednesday unveiled proposals to regulate the wholesale termination charges on 3G mobile networks.

The UK telecoms watchdog also said it will review the wholesale SMS - or text message - termination market in 2007.

Wholesale termination charges are payments made between operators for connecting calls.

Ofcom proposes cutting charges for termination on the networks of the four biggest operators to around 5.3 pence per minutes across both second-generation, or 2G, and 3G networks by 2010 or 2011. The operators are Vodafone Group, O2, which is owned by Telefonica, T-Mobile, owned by Deutsche Telekom and Orange, a unit of France Telecom.

The regulator also proposes that charges paid for call termination to '3' - owned by Hong Kong-based Hutchison Whampoa - should be cut to 6 pence per minute in the same time frame.

Analysts said the proposals to extend regulation to 3G networks, which support higher-speed data services such as video calls, weren't unexpected. Ofcom has regulated termination charges on second-generation networks since 2004.

Hutschison's '3' would likely be hit hardest, analysts said.

"'3' will be most affected by this as historically the 3G networks have not been regulated in wholesale and it has been charging more than its competitors," said Morten Singleton, an analyst with WestLB.

'3' is the only UK mobile operator that does not own a 2G network.

Ofcom said its review of the wholesale SMS market will take 12 to 18 months.

Company Web site: http://www.ofcom.org.uk

-By Ouida Taaffe, Dow Jones Newswires; +44 20 7842 9264; ouida.taaffe@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 13th September 2006