16 March 2011

Cheap Mobile Phone Calls on the Way

Cheaper calls to mobile phones are due to come into force from next month as mobile phone giants are forced to reduce termination charges.

THE cost of phoning mobiles phones from landlines or other mobile networks is to set to fall by 80% over the next four years. The reductions will start as soon as next month when they will be almost halved.

Ofcom, the regulator of the telecommunications industry, yesterday determined that termination charges – the fees mobile phone firms bill each other for handling calls from their networks should be dramatically reduced.

Currently the big three firms (Vodafone, Everything Everywhere (previously known as Orange and T-Mobile) and O2) charge each other 4.18p to connect a call that has originated from another network, a fee that will reduce to 2.66p next month and will then to 0.69p by April 2014, in line with recommendations made by the EC recently.

Ofcom has said that it anticipates landline operators will pass on the cost savings directly to customers and for mobile operators to offer a greater choice of deals to their customers.

The changes have occurred following a vocal campaign by the Terminate The Rate campaign, which was campaigning for charges to be reduced to less than 1p. Whilst they are happy with the final result made they indicated that they felt the charges should have been reduced more quickly.

3 UK the smaller UK mobile phone network currently charges up to 4.48p p.m. but will reduced charges proportionately to its bigger rivals from the start of April.

The major beneficiaries are expected to be smaller mobile firms, who do not receive as many incoming calls, but will not be able to offer lower prices. It should also mean that it is easier for companies to enter the market.

The larger operators all claimed yesterday that pay-as-you-go customers are likely to affected by rising call charges to compensate for the lower termination costs.

O2 said yesterday: "We are deeply disappointed with Ofcom's decision, especially considering the tough economic climate. Pre-pay mobile customers are likely to be hardest hit as they are charged to make up the shortfall.”

At Vodafone their chief executive Guy Laurence said: "We are really disappointed that Ofcom has ignored the evidence that termination rate cuts will mean higher costs for pre-pay customers especially at a time when money is tight for many families.”

Mark Bower, Managing Director at MoneyMaxim said "The next few weeks will be really interesting – both in terms of mobile phone companies resetting their prices, with both pre-pay and pay-as-you-go tariffs seeing changes to compete in the new competitive landscape – but also from the landline giants such as BT and TalkTalk who will see a massive fall in the amount they are billed by the mobile firms.”

"We feel there will be opportunities for many customers to rearrange their current arrangements to make the most of the changes”

**Compare Home Phone Costs with MoneyMaxim