3 UK, the smallest UK mobile operator, plans to aggressively pursue market share following the recent decision by the UK regulator to slash mobile termination rates (MTRs). Last week’s announcement by Ofcom that it would implement larger-than-expected cuts to the rates charged by mobile firms to terminate each other’s calls is seen as highly positive for 3, which – as a small player – tends to pay more in MTRs as their users are likely to spend more time communicating with other networks. “We can now be more aggressive on our voice pricing, and really start to build our market share up,” 3 UK CEO Kevin Russell told the Financial Times. MTRs are understood to have been a major cost burden at 3 UK, which has still to report a pre-tax profit since launching in 2003. The operator joined forces with UK fixed-line incumbent BT on a campaign to get the rate either cut or dropped entirely, claiming the move would create a more level playing field. 3 UK’s position is believed to have been further weakened by the merger between T-Mobile UK and Orange UK – completed last week – which leaves 3 UK as a distant fourth-placed player. 

Ofcom said last week that MTRs would be cut 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. However, Ofcom stressed that its proposals had not been drawn up to help 3. Nevertheless, the move is likely to be contested by the UK’s larger operators – Vodafone, O2, Orange and T-Mobile – which face losing out on up to £1 billion in revenue according to reports. Orange, for example, described Ofcom’s proposals as a “backward step for Britain”, arguing that MTRs had offset the cost of investing in networks.