3/27/2007 10:59:00 AM
Ofcom to cap 3's incoming call revenues
Ofcom is to cap 3's incoming call charges and extend charge controls across the board, in a move that could cost operators as much as half a billion pounds a year until 2011.
Ofcom will nearly halve what 3 can charge other networks to connect incoming calls to 5.9 pence per minute (ppm).
The 45% cut will be phased in but will see 3 take the biggest hit as its termination charges are regulated for the first time.
Ofcom is also extending its cap to include the Big Four, reducing what they can charge by between 10% and 20%.
An Ofcom spokesman said: 'Ofcom has decided to reduce the level of average wholesale charges across the board. The average wholesale charges of Vodafone, O2, Orange and T-Mobile will be reduced to 5.1 ppm in today's prices and will apply when connecting calls on both 2G and 3G networks. For Orange and T-Mobile this represents a reduction of around 20% and for Vodafone and O2 a reduction of around 10%. The reductions from current levels will take place in a number of stages between 1 April and the expiry of the regulations in 2011.'
The cuts are expected to be handed on to consumers.
One operator commentated: 'This is already the most competitive market in Europe – several recent surveys have shown that that the margins made in the UK are among the lowest in Europe.'
A spokesman for 3 said: 'We knew this was coming. It's a complicated document. We will take time to read it and consider our response.'