Ofcom Wants To Slash Mobile Termination Rates To 0.5p A Minute

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Ofcom wants to reduce wholesale charges to make consumers’ tariffs cheaper

Ofcom wants to reduce the wholesale costs that mobile and fixed line operators can charge for connecting calls on their networks in order to reduce prices for consumers.

The communications regulator has been lowering the cost of Mobile Termination Rates (MTR) for some time, but hasn’t reviewed the charges since 2011. Ofcom says that a number of developments, such as the advent of 4G and more efficient mobile technologies that reduce operators’ costs, mean a review is required.

Ofcom MTR

Ofcom England officeSince the last review, MTR have fallen by around 80 percent from 4p per minute to 0.8p per minute. Ofcom’s latest proposals would see rates fall to just under 0.5p, marking a huge reduction from the 14p rate just over a decade ago.

MTR are taken into consideration by mobile operators when they set charges for calls, so Ofcom hopes that yet another reduction will allow them to pass on savings to their customers.

“Consumers in the UK benefit from a thriving competitive market, and mobile calls have never been cheaper,” says Brian Potterill, Ofcom competition policy director. “The average cost of a call bundle has fallen from £40 to around £13 in real terms over the last ten years. We want to ensure mobile users continue to benefit from competition, which will deliver affordable services in the years ahead.”

Ofcom has launched a consultation on the proposals which will close on 13 August with a view to making a final decision by March 2015.

Last week Ofcom said it could repurpose the 700MHz spectrum currently used for digital terrestrial television for mobile broadband services as part of efforts to ensure that the UK makes the most of its spectrum resources as data demand increases.

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