UK telecoms regulator Ofcom has published proposals that would see the wholesale cost of connecting mobile phone calls dropping to less than 0.5p per minute within three years.
These mobile termination rates (MTRs) are charged by rival mobile network operators when they connect calls to a different network. Although they’re not directly connected to consumer tariffs, this wholesale cost will form part of the calculations by network operators when they set their retail pricing.
Termination rates have fallen by 20p per minute within the past 20 years and are currently about 0.8p per minute. The last time Ofcom reviewed MTRs was in 2011, when costs were around 4p/min.
Brian Potterill, Ofcom Competition Policy Director, said “Consumers in the UK benefit from a thriving competitive market, and mobile calls have never been cheaper. 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 is asking for feedback on its proposals to introduce new charge controls on mobile termination rates from April 2015. The consultation closes in August 2014, with a final decision expected by March 2015.