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Ofcom to cut mobile phone connection charges for all

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27/03/2007

There is a strong possibility that all mobile phone users could benefit from cheaper calls after Ofcom, the regulator, told mobile firms to cut their connection charges, representing a substantial saving and investment opportunity for consumers.

After a review, Ofcom has announced limits on the amount mobile phone companies can charge other operators for connecting calls on their networks.

This is expected to lead to a yearly cut of around £400m-£500m in wholesale charges, a reduction described as leading to “significant savings” for consumers in the medium- to long term.

The new limits apply to termination charges, which are coming into force on 1st April, and which are essentially the charges that mobile phone operators levy on each other for taking calls to their networks.

However, the new controls are more than the European Commission would have liked to see, as they are based on the prices paid by mobile phone firms for their 3G licences in 2000, rather than their current value.

The mobile companies spent a total of £22.5bn on 3G licences in 2000 and the Commission had wanted Ofcom to base its calculations on the current market value of the licences, which is less than it was seven years ago.

 

 

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