UK regulator Ofcom has published a statement setting out maximum mobile termination rates for the UK’s five mobile network operators over the next two years, reports Reuters. The pricing controls, which come into force today, represent cuts of up to 21 percent in real terms for the fees the networks charge each other to connect calls. Ofcom has said that the country’s two largest operators, Vodafone UK and Telefonica’s O2 UK, must cut their average mobile termination rates to 4.71 pence per minute, a cut of 8.4 percent adjusted for inflation. Orange UK and Deutsche Telekom’s T-Mobile UK must cut their rates to 4.84 pence per minute, a cut of 11.1 percent in real terms, while 3 UK – the UK’s smallest operator – must reduce rates to 5.83 pence per minute, an inflation-adjusted reduction of 20.9 percent.
According to Reuters, Ofcom is aiming for all the operators to charge the same rate by the end of March 2011 by implementing cuts on a sliding scale. The new guidelines relate back to an initial ruling by Ofcom in March 2007 that was subsequently contested by 3 UK and UK fixed-line incumbent BT. The case was ultimately referred to the UK’s Competition Commission, which issued its ruling on the matter in January. As the UK’s smallest network operator, 3 UK had argued it pays more in termination fees than it receives, and it is therefore unfair that it is subject to the same pricing controls. Ofcom’s latest statement can be viewed here.