Ofcom reviews termination charges

Ofcom is reviewing the wholesale charges UK mobile operators charge each other to connect calls, which it hopes could lower the cost of calls for consumers.

According to the regulator, wholesale charges, otherwise known as termination rates make up 14p in every £1 spent on calls to mobiles.

It has published a consultation to look at how rates should be set from 2011 to 2015.

Ed Richards, chief executive of Ofcom, said: "The role of termination rates in mobile services has attracted enormous controversy. That is why we are determined to examine them from first principles. This consultation gives consumers and industry an opportunity to debate the fundamental questions.

"Lower termination rates are likely to mean that mobile operators have more flexibility in designing competitive call packages, and pass these benefits and any reduced prices on to customers."

The consultation will follow on from Ofcom’s previous termination review in 2007, which said termination rates should fall by about a quarter by 2011.

It will look at how the market is changing, such as how more people are using their mobile phones to access the internet and send messages.

They will then consider six options. These include maintaining the current system, which has already seen rates come down year on year, to a system where the customer’s own network is responsible for all costs of making and receiving phone calls.

Ofcom said most of the options are likely to reduce the current rates but the possible outcome of removing termination regulation from mobile operators is uncertain.