Ofcom demands steep cut in mobile revenues

Ofcom insisted on mobile operators making steep cuts in the amount they charge for connecting phone calls to their networks. The plan will cut mobile companies’ revenue, although it should result in cheaper phone calls for consumers.

The big operators – Everything Everywhere, O2 and Vodafone – will have to cut the wholesale charges they levy for connecting calls to their networks by 84 per cent over the next four years. 3, the smaller network operator, will have to cut its fees by 85 per cent. The wholesale charges represent about 10 to 15 per cent of mobile companies’ revenue, and the big operators have argued strongly against cuts to the fees. Some are expected to consider the case for mounting a legal challenge against Ofcom’s plans. Ofcom said lower wholesale charges should reduce the cost to fixed-line operators of directing customers’ calls to mobile networks. “Ofcom expects these savings to be passed on to consumers in the competitive UK landline market,” it added.