Calling From Landlines To Mobiles Will Be 85 Percent Cheaper

The wholesale price of calling mobile phones from a landline is set to fall 85 percent by April 2015, according to a decision by the Competition Appeals Tribunal (CAT).

Vodafone, O2 and Everything Everywhere all appealed against Ofcom’s landmark decision last April to reduce mobile termination rates over the next three years. But the Competition Commission has decided the opposite should happen, and that the rates should come down further and faster.

The move will shave an estimated £800 million off Britain’s phone bills, The Guardian found.

More talk, less money

If the CAT decision is upheld, the cap on mobile termination rates would mean the cost of calls per minute would fall from 4.18p to just 0.65p.

Vodafone has warned that in some cases, the cuts would actually mean higher costs for service users. It is likely that mobile network providers will try to compensate for lost revenues by penalising their less well-off customers, withdrawing subsidies for pay-as-you-go handsets.

The company also accused fixed line companies like BT and Virgin Media of raising prices at a time when their own costs are falling. Since the cuts started coming into effect last year, BT has increased its line rental charges twice.

Other companies are more positive about the decision. “This determination suggests the competition and consumer benefits made possible by Ofcom’s move to reduce mobile termination rates are here to stay. This is good news for phone users – both fixed and mobile,” says a post on Terminate the Rate campaign (headed by Three and BT) Website.

An appeal against the CAT ruling is still possible, but it looks pretty certain that one way or another, mobile termination rates will go down.