UK Regulator Calls for Cut in Mobile-Phone Charge

UK communications regulator Ofcom on Thursday proposed new caps on the price mobile operators can charge to transfer calls from other networks, meaning lower revenue for the major mobile firms but potentially improved deals for customers.

Ofcom called for mobile termination rates -- the wholesale charges that operators make to connect calls to each others' networks -- to fall from around 4.3 pence (6.5 U.S. cents) a minute to 0.5 pence a minute by March 2015. Cuts will be staggered from 2011 to 2015. As a result, rates will fall by "a whopping 88%" on average, said Matthew Howett, senior telecommunications analyst at Ovum. The ruling will benefit fixed-line operators such as BT Group PLC, their customers and Hutchison Whampoa Ltd.'s 3 UK, said Collins Stewart analyst Morten Singleton, who described the cuts as "aggressive." Large operators Vodafone Group PLC, Telefonica SA's O2, France Telecom's Orange and Deutsche Telekom AG's T-Mobile are the "key losers from this move," he added. Ofcom said the changes "will enable cheaper calls to mobiles for the 32.7 million U.K. homes and businesses with a landline. The proposals will also mean that both landline and mobile operators have more flexibility in designing competitive call packages, promoting competition for the benefit of consumers."