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Lower mobile rates to benefit consumers

  • Published: Tuesday, 15 March 2011

Telephone customers may benefit from cheaper calls and greater choice thanks to a cut in mobile termination rates. These are the wholesale charges that mobile operators make to other operators to connect calls to their networks.

The benefits to consumers

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From 1 April, Ofcom, the UK’s communications watchdog, will place a cap on the rates charged by all four national mobile network operators – 3UK, O2, Everything Everywhere and Vodafone.

This will lead to around an 80 per cent reduction in termination rates over the next four years.

Lower termination rates will hopefully benefit landline and mobile customers in two ways:

  1. Cheaper landline services: lower termination rates reduce the cost to landline companies of passing calls to mobiles. Ofcom expects these savings to be passed on to landline customers. Some operators have already promised to lower their charges.
  2. More choice: lower termination rates increase competition in the mobile market, providing customers with more choice. Operators will have more pricing flexibility and will be able to increase the range of packages available to consumers.

The new rates will apply from 1 April 2011 and end on 31 March 2015.

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