UK mobile operators have responded angrily to the decision of the telecommunications regulator to impose reductions on the cost of many calls and warned that customers could lose out as a result.
In response to recommendations from the Competition Commission, Oftel has called on the operators to cut their termination charges – the additional tariffs for cross network calling – by 15% before July (see
Mobile Phone Operators Ordered To Cut Prices) and to make further reductions of 14% over each of the next three years.
Peter Culham, Oftel chief economist, said that the cuts could reduce revenue at the four UK mobile operators by as much as £2 billion but he emphasised that they could recover much of this amount through lower handset subsidies, higher call volumes and by delaying cuts in other call charges.
Nonetheless, Vodafone UK and Orange have announced their intention to challenge the ruling, with doubts being expressed as to whether BT would pass on the savings to its fixed line customers. T-Mobile also condemned the resolution and said it would have to consider reducing its handset subsidies or revising outgoing call rates. mmO2 went a step further and is delaying the launch of its 3G services until the second half of 2004, as a result of yesterday’s judgement.
