As expected, UK communications regulator Ofcom has proposed cuts in interconnection fees (also known as mobile termination rates), which are the wholesale charges that operators make to connect calls to each others’ networks. The regulator this morning unveiled plans to cut the rate from around £0.043 per minute today to £0.005 per minute by 2015. “As rates fall and operators adapt, consumers will benefit from cheaper calls and competition in both the UK fixed telecoms and mobile markets,” Ofcom said.

The cuts will likely please fixed operator BT and small mobile operator 3, who both teamed on a campaign to get the rate either cut or dropped entirely. Smaller mobile operators tend to pay more in mobile termination rates as their users are likely to spend more time communicating with other networks than their own. The UK’s larger operators – Vodafone, O2, Orange and T-Mobile – face losing out on up to £1 billion in revenue according to reports. Meanwhile Ofcom also said that customers should, by 2011, be able to change mobile providers in one working day rather than two. In addition, operators will have to issue users with the Pac code they need in order to keep their existing mobile number by text message within a maximum of two hours, Ofcom said.