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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

Beer o’clock

Beer o’clock

at Mobile World Congress 2014

James Rosewell writes:

I noticed a new phenomenon at Mobile World Congress this year: Beer O’Clock. Come 5pm Monday through Wednesday, companies with larger booths would break out the Cerveza, Vino, Cava and a small number of Orange juices. All very sociable and fun… until the music started.

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Last week at The Fonecast: 3rd March 2014

The more things change, the more they stay the same

Mark Bridge writes:

So, that’s another Mobile World Congress in the bag. Yes, it was bigger than ever. Just like last year. Just like the year before, too.

Author: The Fonecast
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IBM, smartphones and a graffiti wall: what's the real message?

Mark Bridge writes:

I was ready to poke fun at IBM for its sponsored graffiti wall at Mobile World Congress this year. Graffiti and IBM don't have a comfortable history, as anyone who remembers the Linux campaign from 2001 will tell you.

Author: The Fonecast
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Last week at The Fonecast: 24th February 2014

Are you ready?

Mark Bridge writes:

Some companies have saved their big announcements for the week of Mobile World Congress. Samsung and Nokia, for example. Others have issued a press release in advance.

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When customer service stops working: a complaint about Vodafone

Iain Graham writes:

Vodafone’s admission last week that ‘some customers’ may have been experiencing issues with mobile services came three weeks late for me. I’ve been having my own ongoing battle with the network since the beginning of the month.

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