Mobile operators seek judicial review of price cut order

Mobile operators charge each other and fixed networks for terminating calls onto their mobile networks, and these charges are passed directly to the consumer making the call. And Oftel believes that the charges are too high.

In 2001, the telecoms regulator issued proposals for cost reductions. The country's mobile phone networks – Vodafone UK, Orange, T-Mobile and O2 - rejected these proposals and asked that the case be referred to the Competition Commission.

After a year of investigation, the Commission released its verdict in January this year, agreeing with Oftel and concluding that the termination charges were around 30% to 40% above what the Commission assessed as a fair charge, and that a price control was necessary.

The Commission therefore proposed a price cap, amounting to a reduction of 15% in the termination charge for calls between 1st April to 25th July this year, with a gradual reduction after that until 31st March 2006, when the charge, according to a set formula, would be at a "fair" level.

Vodafone announced almost immediately that it would be seeking a judicial review of the decision and, together with Orange and T-Mobile, went to court last week, arguing that the decision was "fundamentally flawed".

A spokesman for O2, which is not a party to the action for judicial review, told The Times Online that O2 would "watch the case with interest" but that "there was a value on certainty that enables management to get on with developing the business".