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Landline to mobile call costs could fall

Helen Knapman
Senior News Reporter
16 February 2012

Landline users could be able to ring mobiles for less following a ruling to cut the fees mobile operators charge other phone firms for connecting calls to their networks.

Regulator Ofcom ruled last year that termination charges — the amount mobile firms bill rivals — should gradually fall by 80% over the three years starting from last April.

But following an appeal by some of the major mobile providers, the Competition Appeals Tribunal not only upheld Ofcom's decision, but said rates should drop further.

Ofcom hopes a fall in these business-to-business charges will lead to cuts in the price we pay to call a mobile from a landline, as operators' costs will fall.

When termination rates first fell last April, telecoms giant BT passed on cuts to consumers. It says the situation needs to be clearer before it can take any further decisions on its prices, though its previous action nevertheless offers hope.

A BT spokesman says: "The legal process has not yet been completed, so the effect of any reduction in mobile termination rates remains uncertain.

"We need to wait for the impact to be clear before we can examine when and how our customer offerings may change."

Ofcom says reducing termination rates "will bring competition and consumer benefits".

Termination rates also apply to mobile providers when calling other operators.

Ofcom says it is less likely that mobile-to-mobile costs will fall but says providers may add more inclusive minutes to packages.

Business-to-business charges

  • What do mobile firms charge now? At the moment, they charge 2.69p/minute, compared with up to 4.48p/minute at the beginning of 2011.
  • What did Ofcom originally decide? It said prices should fall to 0.69p/minute from April 2014, but it revised those plans in October, saying they should fall to 0.72p/minute from April 2014.
  • Now what has the tribunal decided? It says termination rates should fall to 0.65p/minute from April 2014. This will happen gradually, as rates should fall to 1.23p/min from April 2012 and to 0.67p/min from April 2013.

The mobile firms could still challenge the tribunal's decision. They have until 21 February to decide.

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