5/27/2009 12:47:00 PM
BT and 3 stand against O2 and T-Mobile in termination rates campaign
A public row has erupted between two camps, with BT and 3 on one side and O2 and T-Mobile on the other.
The battle comes after Ofcom published its latest recommendations on mobile termination rates (MTRs).
3 and BT also launched their ‘Terminate the Rate’ campaign last week (20 May).
As part of the campaign, 3 and BT said cutting termination rates 'significantly’ would reduce call costs and benefit the consumer.
3 added that the lower rates would promote fairer competition among operators in the mobile industry.
However, T-Mobile and O2 argued if termination rates were reduced too drastically then costs would have to be met by ‘other means’, such as increased charges on consumers’ bills.
Ofcom’s report laid out six possibilities for future action on MTRs, and invited the industry to ‘debate the fundamental questions’ to find a solution.
At the ‘Terminate the Rate’ campaign launch, 3 CEO Kevin Russell said other operators’ arguments against lowering rates were ‘scaremongering’ and ‘rhetoric’. He added: ‘Since termination rates have decreased, traffic has gone up.’
BT’s managing director of consumer and retail, John Petter (pictured, left), added that the current rates were an ‘unfair tax on every household’ and ‘fattened the profits of the big four’.
Although the aim is to reduce rates effectively down to zero, Russell (pictured, right) said it was improbable that they would be completely abolished, and added: ‘It will most likely be the marginal cost of one pence, as suggested by the EU.’
3, the smallest of the five UK operators and therefore the one with the highest costs from charges, has campaigned for a reduction in MTRs in the past. Sources have said with BT now on board, it could have more success.
One analyst said: ‘It is a big ask, but you shouldn’t underestimate the lobbying power of BT.’