Ofcom looks to lower cost of mobile phone calls

4 June 2014

The cost of mobile phone calls between different networks is set to fall further under new proposals announced by regulator Ofcom.

Operators charge each other a 'termination fee' when connecting calls from different networks – a charge that has fallen dramatically over the past three years, following the last review carried out by the watchdog in 2011.

Since then, the fee has seen a drop of around 80%, from 4p per minute to around 0.8p per minute. A decade ago, termination rates stood at 14p per minute.

Ofcom is now proposing a new charge control on all operators, which would mean the fee would fall to less than 0.5p per minute by 2017 – and continue the trend of falling mobile calls.

It said the mobile phone market has altered radically since it last reviewed the charges, with the four largest operators now aiming to cover 98% of the country with its 4G networks by next year.

With mobile phone technology and networks becoming more efficient, leading to lower costs, Ofcom said it wants to ensure the charges levied by operators reflect the lower costs.

Thriving market

Brian Potterill, Ofcom's competition policy director, said: "Consumers in the UK benefit from a thriving competitive market, and mobile calls have never been cheaper.

"The average cost of a call bundle has fallen from £40 to around £13 in real terms over the last ten years."

The proposals are now open to consultation until 13 August. Ofcom expects to publish its final decision by next March.

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