Blog

Mobile Termination Rates

Mobile termination rates have been the subject of two Competition Commission Enquiries, much self interested argument between fixed and mobile operators and grandstanding by politicians and the media about ‘rip off prices'. The rates are under review by both Ofcom and the European Commission. The Communications Consumer Panel has sought to cut through the technicalities and highlight the consumer issues involved.

Briefly, a ‘mobile termination rate' is the price paid by the operator of the network from which a call to a mobile is made, to the network operator of the person who receives the call. It is intended to compensate the second (mobile) operator for the cost of carrying the call to the person being called. The cost to the first operator is recovered in the cost that is charged to the person making the call.  It sounds esoteric and technical.... and it is, but major changes could have implications for some groups of consumers.

The Panel therefore commissioned a paper from Antelope Consulting, which gives an objective review of the arguments around mobile termination rates, with an emphasis on how the various alternatives would affect consumers.

We do not wish to get into the detailed methodological debates, but will expect to see the final proposals reflecting the consumer and citizen interests in the following ways:

• We would want to see mobile termination rates fall as fast as possible, but this has to be consistent with operators being able to recover reasonable costs to maintain the incentive to invest.
• Any changes should not increase complexity for customers. It is already difficult for customers to decide their best tariff and supplier and (in the absence of much improved systems to help with these decisions) any further complication by changes to the structure of charging would not be in consumers' interest.
• Changes should be evolutionary. The current arrangements are likely to have to change significantly in time if new technologies like Voice over IP become established on mobiles, but changes should be well thought out to minimise the confusion to users.

We welcome the long term review of the future of mobile termination rates being conducted by Ofcom, but ask that, in the arguments between operators, economists, accountants and politicians, the effect on consumers and citizens be paramount.

Comments

There are currently no comments on this post

Post a Comment

Your comment will have to be approved by a site administrator before it is shown on the site so please be patient.