Vodafone has attacked the Competition Commission's decision to slash mobile termination rates (MTRs), saying it will ultimately hurt consumers and damage the pay-as-you-go market.
Last night's ruling by the Competition Appeals Tribunal means by 2015, the cost per minute will plummet from 4.18p to 0.65p. The ruling is stricter than Ofcom's original proposals, which said the charges should be implemented over four years.
In a statement, a Vodafone spokesman said it was 'very disappointed' in the ruling and claimed the decision will ultimately hurt consumers. He said: 'We warned Ofcom at the time of its original decision that drastic cuts in termination rates would disenfranchise many consumers who rely on their phones to keep in touch with friends and family and it is happening....This is because Ofcom’s decision is making it unsustainable for the mobile phone companies to continue subsidising the high cost of mobile handsets for pay-as-you-go users, meaning that they are out of the reach of many people.'
He claimed the decision would lead to fixed-line operators pocketing reductions in MTRs, rather than reducing prices. However, he added the operator had still to decide whether it would appeal the ruling.
Three and Ofcom both welcomed the ruling. A spokesman for Three said: 'This direction suggests the competition and consumer benefits made possible by Ofcom’s move to reduce mobile termination rates are here to stay. This is good news for phone users – both fixed and mobile.'
An Ofcom spokesperson said: 'Ofcom is pleased the Competition Commission has endorsed Ofcom’s decision to reduce significantly termination rates which will bring competition and consumer benefits.'