Orange tells Oftel to back off

Mobile telecoms operator Orange has told Oftel to back off or it will pull its third-generation (3G) services from the market.

The company is furious after the regulator decided to refer the price that mobile phone firms charge consumers to receive calls from other networks to the Competition Commission.

Orange claimed that Oftel is trying to cut prices in one of the few areas where operators are profitable.

Peter Dunn, director of regulatory strategy at Orange, warned that the move would cause profit problems for a mobile phone company which might have to "rethink its strategy for implementing its 3G network".

He told the BBC that Orange would have to slow down its rollout plans and shrink the size of its 3G network.

"Our licence commits us to covering 80 per cent of the population in five years' time, but to reach that you don't need to cover much of the country," he explained.

But Oftel denied that it is being heavy-handed and stressed that it is simply seeking appropriate regulation.

A spokesman insisted that the regulator was "softly softly" wherever possible but pointed out that the returns on calls to mobiles are significantly above costs.

The Competition Commission is due to finish its investigation this month, although a six-month extension can be granted.