Oftel’s director general of telecommunications, David Edmonds, today confirmed the Competition Commission’s ruling that the UK’s four mobile phone operators will be have to dramatically reduce their call charges.
The move, which has prompted a number of telephone companies to threaten a judicial review over prices, will require Vodafone, Orange, O2 and T-Mobile to cut their termination charges by 15% before July.
Edmonds, who strongly defended the decision earlier today on BBC Breakfast News, said that Oftel supported the Competition Commission’s view that consumers are paying too much for calls to mobile phones and are being overcharged by up to 40% for terminating calls onto their networks.
He said: “The mobile operators must reduce their charges to a fair level. In competitive markets, consumer choice puts pressure on companies to make prices reflect cost, or risk losing their customers.”
Oftel estimates that the initiative will allow consumers to save £190 million each year to 2006 in calls from fixed lines to mobile phones, with further cuts proposed over the next two years.
Edmonds emphasised that the cuts: “Will not jeopardise the mobile operators as they will be able to make a fair return on terminating calls to their networks.”
However, the move has already prompted mmO2 to embark on a cost cutting programme that will delay the launch of its commercial 3G service until the second half of next year. Commenting on the Competition Commission ruling, Peter Erskine, chief Executive of mmO2, said: “We are disappointed by the outcome of the inquiry. We believe that the UK mobile market is highly competitive, offering mobile customers choice and value for money.”
