Phone calls set to get cheaper
Calling a mobile phone from your landline is set to get cheaper under new proposals from Ofcom.
The communications regulator wants phone operators to slash the charges they impose to connect calls to other networks – known as mobile termination rates. These are currently around 4.3p per minute, but Ofcom says they should fall to 0.5p per minute by 2015.
It says this could lead to cheaper calls to mobiles for the 32.7 million UK homes and businesses with a landline. It could also lead to landline and mobile phone operators offering more competitive call packages to customers as the charges also apply to calling other mobiles on different networks.
Termination rates make up a significant cost of a phone call, yet most people are unaware they pay them, according to Mike Wilson, mobiles manager at moneysupermarket.com.
The reduction will be phased in by Ofcom, but Wilson says customers should see the benefits in the form of cheaper calls or more minutes of voice calls a month in your tariff.
Ofcom last set termination rates in 2007, but it says the mobile market has changed significantly since then. The number of calls made to or from mobile networks has soared by 200% over the last year alone.
Ernest Doku, spokesman for mobile phone comparison website Omio.com, says mobile phone users on smaller networks have been “heavily penalised” by network termination rates.
He welcomes the proposals as paving the way for cheaper calls - but warns phone operators may resist the changes.
"Rest assured that the major carriers won't take this decision lying down and what the consumer gains on cheaper call costs, they may well pay for in other areas," Doku explains.
Major operators may well attempt to recoup their losses in revenue from other sources, such as increased line rental fees or higher handset prices.
Ofom has also announced that from 2011 mobile phone customers will be able to ‘port’ their number to a new provider in just one working day rather than the current two days.
In addition, the code consumers need to switch provider and keep their number will in future be issued immediately or within a maximum of two hours by text message.
Currently, the time and way these codes are issued varies from provider to provider, with some issuing these by letter - which can take several days to arrive.
Around 11 million Brits have switched mobile network over the last 12 months - cutting their annual bills by a whopping £895 million, or £81 each per year, according to uSwitch.com. However, around 40% have never switched partly out of fear of losing their existing phone number.
Ed Richards, chief executive of Ofcom, says over 70% of consumers want to keep their mobile number when they switch providers.
By reducing the time it takes to transfer a mobile number to one working day, and enabling consumers to obtain a porting code quickly, should make it easier for consumers to switch provider, he adds.
Wilson agrees: "Number porting is essential for people to be able to swap mobile providers and get a better deal."
However, he warns that responsibility will still lie with the customer to access the code, and not the new provider: "In many cases, customers are not being offered the best deals until they have threatened to leave their existing operator, but this decision mostly eliminates the time frame for operators to try and retain a customer and should help to ensure providers offer the best deals up front."
And Matthew Wheeler, communications expert at uSwitch.com, says the UK still lags behind other countries: "Why should Brits settle on waiting a day to receive a code when our Irish neighbours can get their code in two hours?"