Mobile firms in rate cut revolt

Mobile phone companies have been swift to react to the Competition Commission's ruling that they must cut their prices by 30 per cent over the next three years.

Some operators have warned that they will press for a judicial review, while others have said they will be forced to delay the launch of 3G services.

UK operator O2 has claimed that the loss in revenue will mean that its 3G plans will be delayed until the end of 2004, and that it may rethink its current connection charges. The company is likely to be hard hit, as 75 per cent of its revenue is generated from calls within the UK.

Vodafone has vowed to seek a judicial review of the decision and is claiming that the changes will end up costing consumers more.

"We believe that the report is fundamentally flawed and, as a result, will be seeking a judicial review to protect the interests of our customers," said Gavin Darby, chief executive of Vodafone UK.

"The UK is one of the most competitive markets in Europe; this is harsher regulation on top of increased competition."

In a terse statement T-Mobile suggested that it would either reduce its handset subsidies or rethink its outgoing call rates.

Orange has taken a more conciliatory approach, expressing regret at the decision but not threatening to automatically raise prices.

BT, however, was quick to issue a statement that it would pass on the price cuts for its fixed line customers who call mobile phones.

BT is trying to retain its fixed-line customer base as people switch to mobile phones.