Mobile operators face price probe

Oftel has officially referred all four of the UK's major mobile network operators to the Competition Commission for overcharging customers.

The formal move follows the regulator's notice last December that it would call in the authorities over its belief that rates charged by Orange, Vodafone, BT Cellnet and One2One for calls between networks were charged at artificially high levels.

Oftel said in September that it wanted prices reduced by 12 per cent lower than inflation for the next four years, but the four operators have rejected the proposals.

Network providers Cable & Wireless, Colt Telecom, Energis, Kingston Communications, Thus and WorldCom have jointly complained to Oftel, saying that the regulator has not gone far enough in capping the inflated rates the providers were forced to pay network operators.

"These excessive charges, which are not subject to competitive pressure, as Oftel has recognised, adversely affect both consumers and operators that pay for mobile termination, and produce inefficiency and distortion in network investment in the UK," the network providers said in a collective statement.

Oftel has asked the Competition Commission to carry out its own investigation, and to consider changing the operators' licence conditions to force prices down if it agrees they are too high. Alone, Oftel cannot compel the operators to cut their rates.

The Competition Commission has six months to reach a decision, although this may be extended to 12 months.