10/13/2008 5:35:00 PM
3 shows how low it can go with new unlimited £15 tariffs
3 is launching a £15 per month all-you-can-eat-tariff between 3 users, which it claims showcases how aggressive it could be on pricing if termination rates were lowered.
CEO Kevin Russell revealed that 3 will offer the unlimited calls, text and data package between 3 users from 1 November and claimed 3 would offer a cross-network all-you-can-eat package for £25 if it were not restricted by termination rates.
Russell said: ‘Wouldn’t it be a good thing if we could say, “Here’s your unlimited voice, unlimited text and unlimited data for £25?” We could do that if we brought down termination rates.
'SMS doesn’t cost a network anything. It’s nothing in the context of the network capacity. Even cross-network voice calls should be closer to 2p. We currently pay 6p per minute and between 2p and 3p per SMS message.’
Russell claimed that 3 has had to pay over £190m to its larger operator rivals in termination fees. He added: ‘I’m currently charging 8p per minute for voice, but I could do it for 2p. The only thing stopping that is mobile termination rates.’
3 faces an uphill battle to get termination rates lowered. The operator suffered a setback in May when the Competition Appeals Tribunal ruled that 3 does have ‘significant market power’, and that it should be subject to the price controls imposed by Ofcom.
However 3’s fight has been supported by EU Commissioner Viviane Reding, who has called the rates ‘a real distortion of competition’. Vodafone has been the most vocal opponent of Reding’s views.