Out-Law / Your Daily Need-To-Know

Orange, the mobile phone operator, has threatened to scale back investment in third generation mobile technology (3G) if the telecoms watchdog goes ahead with proposals to cut the costs of making calls to other networks, according to a report in The Observer newspaper.

The UK company apparently objects to Oftel’s plan to refer the price that mobile phone companies charge their consumers to receive calls from other networks to the Competition Commission.

Orange has accused Oftel of cutting costs in what it considers to be one of the few areas where mobile phone companies are profitable. The company warned that reduced profits could force it to reconsider investment in its 3G network.

A spokesman for Orange told The Observer:

“Our licence commits us to covering 80% of the population in five years’ time, but to reach that you don’t need to cover much of the country. You could see the opening up of a digital divide.”

Oftel insists that charges on calls to mobiles are “significantly above costs” and denies that the market is over regulated. The Commission’s decision is expected next month.

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