Ofcom plans to continue imposing controls on wholesale mobile call termination charges, the telecoms regulator confirmed in a consultation published today. The proposals also extend the controls to 3G networks.
Mobile call termination charges – where mobile network operators charge a fee to connect calls that are made from another fixed or mobile network – generate more than £2 billion per year for operators and account for about half the price of a typical call from a BT fixed-line phone to a mobile.
Ofcom has been controlling termination charges imposed by dominant 2G networks since 2004, when a review established that mobile network operators control the charges, as callers have no choice but to use an operator’s network to call a customer whose mobile phone is on that network.
To protect consumers, Ofcom therefore imposed restrictions on the amount each of the four 2G mobile network operators could charge to connect a call to its 2G network. In December 2005, Ofcom announced that these charge controls would be extended for a further year.
The relevant regulation expires in 2007, so the regulator has had to look again at the issue. It has now completed the second of three consultations and is inviting comment its proposals. These state:
- mobile network operators appear to have a dominant position in connecting callers to subscribers on their own network;
- structural or technical change in the market – that might create competition and remove the need for regulation – is currently neither practicable nor feasible;
- the current charge controls – or controls similar to them – remain the most efficient and proportionate way to prevent excessive pricing;
- the increasing volume of calls to 3G networks suggests that charge controls should now apply to both 2G and 3G networks; and
- mobile network operators must continue to connect calls on their network subject to fair, reasonable and non-discriminatory terms, and ensure a transparent view of wholesale charges.
Comments are requested by 25th May 2006.
The regulator has not yet taken a view as to the appropriate level of the proposed charge controls. It says this will form part of the subject of the third and final consultation later in 2006 when detailed cost modelling has been completed.
