The Competition Appeal Tribunal has referred the question of wholesale mobile termination rates – the fee each operator charges another to connect a call on their network – to the Competition Commission after appeals by BT and 3.
The appeals come after Ofcom changed the controls on mobile termination rates early last year, which it said at the time would save operators £400 to £500 million a year and that saving should be passed on to retail customers.
According to The Guardian, the operators are now hoping to get termination rates down to nothing in order to be able to offer all-you-can-eat call plans of the type that have become common in the US. If that’s the case, great. If it saves the operators money, that’s great too – as long as the operators remember to send a bit of those savings our way, as Ofcom asked for.
That’s interesting, especially since 3 have the highest termination rates of the operators:
http://www.theregister.co.uk/2007/05/29/3_moans_about_ofcom/
Ofcom (on your behalf) took billions in 3G licence fees, and encouraged the 5th entrant to the UK market.
Regardless of your personal views, it’s hard to argue against the fact that the 5th entrant has pretty much single-handedly revolutionised the UK mobile market. Would any of the others have moved had it not been for the introduction of hungry competition? Very, very unlikely.
The termination fee is a government construct, and a hangover from days long gone. The industry doesn’t need it to survive – case in point: the USA.
If having it in place penalises one firm but not others, and therefore stifles further competition, then it should indeed go. Like the 7-day number portability timeframe is going.
/m
thanks!