Cheaper mobile calls move closer

The High Court has given the green light for cuts to mobile phone charges that could save consumers £660m over the next three years.

In a judicial review hearing, the High Court today backed the Competition Commission's decision to impose the reductions, which apply to network-to-network and landline-to-mobile calls and run until 31 March 2006.

Judge Moses ruled that the Commission had adopted "a reasonable and justifiable approach".

He also rejected arguments that the Commission could not impose the cuts over the three-year period because the regulatory role will be taken over by the European Union from 25 July this year.

In January, the Competition Commission recommended an initial cut of 14 per cent for T-Mobile and Orange, and 15 per cent for O2 and Vodafone.

This would be followed by further annual reductions of 14 to 15 per cent over the next three years, saving users an estimated £660m.

Vodafone, T-Mobile and Orange joined forces to complain that the cuts put them in a "financial straitjacket".

The operators are now obliged to reduce prices before 24 July. But a loophole means that some may put charges back up again a day later.

Delays mean that the European Union directive giving it the power over the market is unlikely to come into force until September at the earliest.

Vodafone, for one, said in May that it will raise prices as soon as the UK regime ends, effectively allowing it to cut prices one day and raise them the next.

Oftel has warned operators that, if they decide to flout the original ruling, the Department of Trade and Industry will implement statutory powers enabling it to regulate the operators until the European measures come into force.

"I am taking steps to ensure the operators maintain these reductions after 25 July," said David Edmonds, director general at Oftel.

"I hope that the three companies, who have lost every challenge to Oftel's analysis and decisions, will now behave in the interests of all those UK consumers who call mobile phones."