The main mobile operators – O2, Everything Everywhere and Vodafone charge 4.18p a minute to connect other phone companies calls and this is the charge that will be reduced to 2.66p next month and will drop to 0.69p by April 2014.
Ofcom expects the savings to be passed onto customers and should offer more choice in the marketplace as a result.
The Exception to this has been 3 UK who has enjoyed a higher charge of up to 4.48p a minute which is more than it’s rivals were allowed to charge. 3 UK will also now be forced into reducing it’s charges in line with everyone else in future starting from April 2011. Termination rates have already declined by 35% since 2007 when Ofcom last imposed caps on the rates.
Whilst this will obviously impact mobile phone companies revenues, it is clear that the trend towards smart phone technology will replace these loses given that Data services such as mobile broadband and Internet access already accounts for a large proportion of mobile phone operator revenues and is set to grow by 90% over the next few years.
The termination rate caps apply only to voice calls, which are likely to account for a less significant proportion of mobile phone companies’ revenues over the next four years anyway, added Ofcom.
its is thought that this reduction in charge will also manifest itself in higher handset costs and longer contract terms and the loss of “so called free handsets” as the subsidies currently offered to customers will be much more difficult to find and pass on in this way.
Overall, this change in the regulation will be warmly welcomed by consumers as they will see a reduced monthly bill for calls even if handset costs rise as consumers pay for the “free mobile” one way or the other with the way the market place is currently structured.
Rather a change from the increase in the cost of living we have all been experiencing of late!






