UK Operators Facing Further Cuts in Mobile Termination Rates

The UK's Competition Commission has ruled that the mobile operators should lower their landline to mobile termination rates by around 20% by 2010/11 - and to a rate which is lower than was proposed by the telecoms regulator, Ofcom.

The Commission ruled that the rates for the four main networks (O2, Orange, T-Mobile and Vodafone) will have to fall to 4 pence per minute - compared to Ofcom's plan for a reduction to 5.1ppm, while the rate for newish entrant, Hutchison 3G UK (H3G) should fall to 4.4ppm.

The Commission had been asked to look into the termination charges by H3G and the dominant landline operator, BT.

The H3G appeal has also included non-price control matters, which have been previously considered by the Tribunal. The Tribunal will consider the CC's determination before making a final ruling and giving directions to Ofcom.

The Communications Act 2003 provides that the price control elements of certain appeals against decisions by Ofcom must be referred to the CC for determination. The Tribunal referred the price control matters to the CC in March 2008. The tribunal will have to decide whether to accept the Commission's recommendations - and a decision is expected next month.

Posted to the site on 23rd January 2009