4 December 2006
Telecommunications regulator Ofcom has received criticism from telecom companies and the European Commission for its proposed mobile termination rates which could see fixed-line customers over charged for certain connections.
Mobile termination rates are the charge levied at consumers for connecting a call from a rival mobile or landline telephone network. The current capped prices are due to expire in March 2007 and Ofcom has proposed cuts that would take the charges to between 5.3 pence and 6 pence a minute.
BT, along side Cable & Wireless, has accused Ofcom of getting the balance wrong between weighing up the needs of UK mobile operators to recoup money spent on third-generation mobile licences, with the needs of the consumer.
The two telecom giants have declared that landline customers should not be charged extra for calling a 3G phone since they are only making a voice call and are not receiving any of the benefits of the third generation technology.
According to BT's calculations, British landline customers will pay up to £175 million more than they should when making a call to a mobile phone.
"BT believes strongly that the proposals in [Ofcom's] consultation document get the balance wrong, with the result that users of fixed phones in particular will be significantly over-charged," said BT.
In an open letter, the European Commission called on Ofcom to rethink its approach, stating that its proposed termination rates were "higher than necessary".