Mobile bills set to fall as Ofcom bids to cut costs

Oliver Smith
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TELECOMS regulator Ofcom has set out plans to slash the wholesale cost of connecting mobile phones, a move that could lead to cheaper bills for consumers.

So-called mobile termination rates, the charges from operators for connecting calls to a different network, will fall thanks to a new charge control proposed yesterday.

The new regulation would see termination rates fall to less than 0.5p per minute by April 2017, from a current average of around 0.8p per minute.

Ofcom concluded its previous review of the market for mobile termination rates in 2011, imposing a control on the rates charged by the four biggest operators.

Since that point, industry rates have dropped 80 per cent, down from 4p per minute.

Ofcom yesterday said the mobile market has changed significantly since its last review. The amount of spectrum available to provide mobile services has also risen dramatically, following the release of the auctioned 4G spectrum in 2013.

The four biggest mobile operators have all launched competing 4G networks, with operator Three being the last to launch in December.

At present, the networks are used for high-speed mobile broadband, but operators are expected to start using them for voice calls.

“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,” said Ofcom competition policy director Brian Potterill.

“We want to ensure mobile users continue to benefit from competition, which will deliver affordable services in the years ahead,” he added.

The regulator added that it expects to publish its final decision by March 2015.