5/20/2009 4:11:00 PM
3 and BT launch campaign on termination rates
3 and BT have joined forces with businesses and consumer groups to launch a campaign calling for Ofcom to bring in a significant cut to termination rates.
The launch of the ‘Terminate the Rate’ campaign coincided with the release of a new Ofcom recommendations on mobile termination rates (MTRs) for the next six years.
Larger operators are reluctant to reduce termination rates because their large customer bases mean they bring in high revenues from the charges. Meanwhile, smaller operators such as 3 send out more calls than they receive, making termination rates a greater cost.
3 and BT said cutting termination rates would benefit the consumer and facilitate more balanced competition in the mobile sector – with 3 adding that reduced rates would also allow ‘unlimited’ calling bundles.
According to BT, termination rates currently cost the consumer £700 million per year in calling costs.
3’s CEO Kevin Russell said: ‘If termination rates went down, we could see an opportunity to bring calling charges down to one pence per minute.’
BT’s MD of consumer and retail, John Petter said: 'Fixed-line phone users know that calling a mobile is too expensive. We've done what we can to bring down that cost, but with MTRs accounting for up to 80 percent of the price per minute of a call from a home phone line to a mobile, the only way to get better prices is to Terminate the unfair Rate.’
BT and 3 are leading the campaign with the support of other organisations such as; the Federation of Small Businesses (FSB), National Union of Students, Britain’s General Union (GMB). They invited other organisations to join in with the campaign.
Meanwhile, Ofcom published a review of how termination rates would change in the period 2011- 2015 today (20 May). In 2007 the regulator set out how wholesale termination rates would fall annually until 2011.
The new recommendations sets out six options which included; keeping the same policy as was set in 2007 which has led to a decrease in rates year on year - as well as more radical suggestions such as setting the rate to zero.
Ed Richards, Chief Executive of Ofcom, said: ‘The role of termination rates in mobile services has attracted enormous controversy. This consultation gives consumers and industry an opportunity to debate the fundamental questions.’