Ofcom to slash mobile termination rates

Ofcom wants cross-network calls to be as low as 0.5p per minute by 2015

Calls made across mobile networks could be made dramatically cheaper by 2015 after Ofcom announced that it wants mobile operators to cut the charges to customers for connecting calls to other operators' networks.

The regulator's latest Market Review (PDF) said that mobile termination rates, the fees charged by mobile network operators to connect calls made from other fixed or mobile networks, will drop from 4.3p per minute to 0.5p per minute by 2015.

Ofcom believes that the proposals will give landline and mobile operators more flexibility to design competitive call packages to benefit consumers and businesses.

Matthew Howett, senior telecoms analyst at Ovum, pointed out that the figures proposed by Ofcom would see prices fall by "a whopping 88 per cent on average", and is great news for BT and its customers.

"The announcement is welcome news for BT, as it would allow it to bundle minutes to mobiles within call packages, which has been prohibitive up until now given the cost," he said.

However, Howett warned that the move is a "significant threat" to the revenues of mobile operators, which may have to raise prices in other areas.

"Those who will feel the most pain will be the mobile network operators, as these charges account for as much as 15 per cent of their revenue, and they may look to raise subscription charges to offset this," he said.