http://www.ofcom.org.uk/media/news/2009/05/nr_20090519b

19|05|09
Mobile termination rates: options to benefit UK consumers

Ofcom today published a review of mobile termination rates - the wholesale charges that operators make to connect calls to each others' networks - to ensure that they benefit UK consumers.

In 2007 Ofcom set wholesale termination rates to fall annually until 2011. This will result in termination rates falling by around a quarter over that four year period.

Todays review examines how rates could be set from 2011 to 2015 allowing a thorough consultation ahead of expiry of the current charge controls.

Lower termination rates are likely to mean that mobile operators have more flexibility in designing competitive call packages, and pass these benefits and any reduced prices onto consumers.

The consultation sets out six options including maintaining the current system, which has already seen rates come down year on year, to a system where the customer's own network is responsible for all costs of making and receiving phone calls.

Some of the options are radical alternatives to the current arrangements and Ofcom is exploring a range of options to ensure the best outcome is secured for consumers in a changing mobile market.

Ofcom expects that most of the options are likely to reduce the current termination rates. The possible outcome of the deregulatory option where termination regulation will be removed from mobile operators is uncertain.

Ed Richards, Chief Executive of Ofcom, said: "The role of termination rates in mobile services has attracted enormous controversy. That is why we are determined to examine them from first principles. This consultation gives consumers and industry an opportunity to debate the fundamental questions."

See Related Items for Ofcom's consultation on mobile termination rates.

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There is a consultation document:

Wholesale mobile voice call termination
Preliminary consultation on future regulation

Consultation published: 20|05|2009
Consultation closes: 29|07|2009

http://www.ofcom.org.uk/consult/condocs/mobilecallterm/

Out of respect for the OP, I feel that this thread demands a second posting.

I have taken the trouble to briefly review the consultation document and offer the following interpretation. I will add my personal views about the direction that Ofcom should be taking if a discussion develops.

1. The issues under discussion are complex and addressed in complex terms. This is a preliminary consultation covering regulations that would be introduced to apply from 2011.

2. This consultation addresses the rates for termination of calls on mobile networks, not the regulation of the costs of calling landlines from mobiles (although this could be affected indirectly). It covers mobile to mobile and landline to mobile calls, thereby affecting both mobile and landline tariffs.

3. It is seen that the level of termination rates determines the extent to which costs are recovered (with a margin) through the respective call charges as against by other means. Telephone service providers recover their costs and obtain a margin in various ways, subject to the market and regulation thereof. As with all service businesses, there is often no true relationship between specific unit costs and charges, which makes it difficult to determine how charging may be equitable.

4. Ofcom declares a clear policy of reducing termination rates, which is seen as inevitably leading to higher charges in other areas. Low termination rates however are seen as providing greater opportunities for bundling, which enables users to choose a fixed rate package that addresses their needs.

5. Ofcom indicates a reluctance to be associated with any move that would lead to recipients being required to pay to receive calls. This would be an effect of setting termination rates too low.

6. 6 options are presented for comment. The first, no regulation, is dismissed. The latter two, zero rate and alignment with fixed line rates, are seen as radical and likely to have unwelcome consequences. Three alternative economic models, the present system, the EC-preferred minor modification of that and a more realistic alternative, are offered for the consideration of those able to get their heads around the economics.

I cannot see any clear issues that are common to the positions shared by members of the forum (apart from the often expressed view that everything done by Ofcom does is based on corrupt engagement with the telecommunications industry).

A simplistic understanding of the essence of saynoto0870 is that callers should never bear costs related to the manner in which the recipient handles the call. Discussion in the forum shows that this is too simplistic, as members tend to differ in their view depending on who the recipient is and whether there are seen to be opportunities for profiteering by any party.

I would be pleased to read alternative interpretations and to participate in discussion on the issues raised if anyone can see points that may fall within the general scope of this forum.

From today's Daily Mail



http://www.dailymail.co.uk/news/article-1366352/Cost-calling-mobile-phones-set-fall-Ofcom-imposes-reduction-charges.html

Also from the BBC


http://www.bbc.co.uk/news/business-12743038

Terminate the Rate has published the rates over the next three years:

http://www.terminatetherateblog.org/2011/03/it%E2%80%99s-official-ofcom-rules-in-favour-of-cheaper-calls-to-mobiles/

They fell to 2.66p in April 2011, will drop to 1.70p in 2012, 1.08p in 2013 arriving at 0.69p in April 2014.

It will be interesting to see how this will affect charges to mobile phone users, and whether the landline providers will pass on the saving.

Mobile termination rates have dropped quite a bit now.

Since the beginning of this month, BT Wholesale pays out 0.848 pence per minute to the four main mobile network operators which are 3, EE (which is Orange and T-Mobile combined), O2 and Vodafone.

Despite the drop, there are no charges for incoming calls (which may otherwise decrement bundled minutes). There was the possibility that pay-to-receive was coming, so why hasn't this happened?