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Thursday, October 1, 2009

Termination rates are already falling - so why all the fuss?

Mark Bridge writes:

With over 100,000 people having signed its petition in four months, there’s no denying that the Terminate The Rate campaign is attracting supporters. And with promises including “BT and 3 are working together on a petition that will lower your phone bill by reducing the level of Mobile Termination Rates”, it’s easy to see why.

But what’s the point of all the campaigning - and has it really achieved anything?  Terminate The Rate – which is run by 3 UK – says mobile networks charge a Mobile Termination Rate (MTR) of around 4.7p per minute for connecting a call to another network. That’s a lot of money over the course of a year. But those networks also pay that 4.7p when calls are connected to them, which cancels out a fair bit of it. Now, I don’t doubt there are some profits in there. But, to be frank, I don’t see much real consumer benefit in cutting termination rates. It seems to me that any profits lost from MTRs would simply be generated from increased charges elsewhere. Even if new tariffs offered ‘more value’ they’d be likely to cost more. Regulators have even suggested that we could cut MTRs and then pay to receive calls. Do I hear the sound of a lead balloon going down?

And I’ll confess I’m suspicious of 3’s volte-face; arguing in favour of increased MTRs when it suited and then arguing against them when it didn’t get its way.

Okay, so none of us likes spending money when we don't see a benefit – but talking about “bill shock” and a “a secret tax on consumers” is more like tabloid rhetoric than an informative campaign.

And some of the campaign supporters seem to be sending confused messages, too. For example, the Plain English Campaign said “Consumers deserve the right to understand complex issues that affect them in the simplest possible terms and we support any organisation that strives to do this” – which seems to suggest it would just as happily support an increase in termination rates if the organisers had a ‘Crystal Mark’ on their literature. There’s also plenty of talk from organisations about supporting the campaign because it’ll reduce charges – although that's certainly not guaranteed.

I was pleased to see that Martin ‘Money Saving Expert’ Lewis was, like me, unconvinced by the campaign. He told us “We’ve decided not to back the Terminate the rate campaign for the time being. As the decision was in the balance we put it to our users and the majority weren’t in favour of doing so. This is an important issue and one to look at, though we’re not fully convinced a campaign run by a big mobile phone network which is in its own vested interest is the right way to go forward”. And that makes me wonder how many other organisations had also declined to join 3 and BT’s party.

Terminate The Rate plans to give its petition to Ofcom later this month. And then what?  Perhaps my biggest complaint about the campaign is that, even before it launched, the European Commission had told Ofcom and other European regulators to make sure MTRs reflected actual costs. And MTRs are already set to drop next year. Which suggests everything’s in hand. And in 2011, when the current charges are reviewed, we’ll probably see a decent-sized drop in MTRs... which would have happened regardless of any campaign.

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Opinion Articles

Is Android losing its impact for Google?

Mark Bridge writes:

Recent figures released by ABI Research have prompted the market intelligence company to ask whether Google is losing control of the Android ecosystem.

At first glance, Android dominated smartphone shipments for the final quarter of 2013. ABI Research says 77% of the 287 million smartphones shipped in Q4 2013 were running Android.

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It’s time to prepare for the upcoming surge in signaling traffic

Robin Kent writes:

After initially suffering from slow pick up by consumers, 4G has begun to accelerate, and is now well on the way to the forecasted one billion subscribers by 2017. In fact EE, owner of T-Mobile and Orange, recently announced the addition of 493,000 new 4G customers to its existing base of 1.2 million.

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Mobile phone coverage: is this as good as it gets?

Mark Bridge writes:

A new report has highlighted the issue of poor mobile phone coverage in rural Sussex villages. BBC Sussex invited me onto their ‘Sussex Breakfast’ radio show to explain what could be done - and, as usual, I made enough notes for a lecture rather than a three-minute interview.

Here’s what I would have liked to have said if I’d been given a disproportionate amount of time to talk.

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Last week at The Fonecast: 27th January 2014

Expecting the unexpected

Mark Bridge writes:

Great news for mobile phone users. Ofcom’s new rules preventing unexpected mid-contract price rises came into force last week, which means UK consumers can no longer be surprised by their subscription charge increasing while they’re still locked into a minimum-term deal.

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Ofcom changes the rules for mobile phone contracts... and so does O2

Mark Bridge writes:

This week, new Ofcom rules came into force. They’re designed to avoid unexpected price rises during the minimum term of a mobile phone contract. Yes, just because you signed a fixed-term contract doesn’t mean the charges can’t increase. Networks said they needed this option in case of inflation or regulatory changes. Customers felt trapped.

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We're taking a look back at the biggest mobile industry news stories from February 2015, including allegations that the UK's security service tried to breach SIM card security by hacking into one of the world's biggest SIM producers.

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A month of mobile: O2 counts on 3, Microsoft counts to 10 and Apple counts its profits

Podcast - 30th January 2015

We're back with a month of mobile industry news, including takeover talks and takeover rumours. O2 and Three are said to be discussing a merger... but is there any truth in the suggestions that BlackBerry could be up for grabs?

We also discuss Apple's record-breaking quarterly figures, the highlights of CES and the launch of Microsoft Windows 10, as well as saying farewell to the current version of Google Glass.

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