[3GScottishUser]

Just released today the final detailed ruling and final consultation on the harmonisation of termination charges to mobile networks.

It appears that price reductions will be staged but the good news is that there will be an end to the disproportionate charging for 3G services from March 2007 (as predicted :))

"The charge control should apply for 4 years from 31 March 2007
Average charges of Vodafone, O2 , Orange and T-Mobile should be reduced to 5.3 ppm (2006/7 prices) by the final year of the charge control period (1 April 2010 to 31 March 2011). This would remove the current differential charge control between providers who use 1800 MHz as opposed to 900 MHz spectrum. The reduction should be implemented in 4 equal (percentage) steps across the four years. However, Ofcom will re-evaluate the proposed final level of the charge and the glide path cap (in respect of each MNO separately) in the light of responses to this consultation exercise.

Average charges of H3G should be reduced to 6.0 ppm (2006/7 prices) by the final year of the charge control (1 April 2010 to 31 March 2011). This level reflects exogenous cost differences between H3G and the 2G/3G MNOs. The change to be implemented by one of three alternative paths (to be determined by Ofcom following consideration of responses to this consultation exercise); either (i) a glide path of four equal percentage changes to the 2010/11 level; (ii) an initial reduction to 8.5ppm (2006/7 prices) in the first year of the control (1 April 2007 to 31 March 2008) followed by three reductions each of equal percentage change across the next three years; or (iii) an immediate reduction to cost in 2007/08 falling to the cost level in 2010/11 over four years. The proposed level of the charge cap in the final year of the four year control will also be re-evaluated in the light of responses to this consultation exercise (and the size of the charge reduction in the first year under option (ii) may also be adjusted).

Further conditions should be imposed requiring provision of voice call termination on fair and reasonable terms and conditions (including contract terms), prohibiting undue discrimination, and requiring charge and contract term transparency. "

The full details can be found here: http://www.ofcom.org.uk/consult/condocs/mobile_call_term/mobile_call_term/

[hecatae]

and for anyone who thinks the above is gobbledy gook

termination charge also known as how much it costs to call a network

[Ben]

I'm glad that there is to be more downward pressure on termination rates, and it's nice to see that 3 will have to start falling into line too. Unless I'm mistaken their termination rates, what other networks have to pay 3 when a subscriber calls a number on their network, are higher than those of the other operators. While the reductions are phased, I don't doubt that it's 3's bottom line that will be hurt most by this. That said, I'd imagine 3's subscribers spend the majority of the time calling other networks (statistically at least) so there are also savings to be made.

[3GScottishUser]

Ofcom got a light rap on the knuckles for not proving that they completed proper investigation re 3's power to contol BT's pricing. The competition tribunal slated 3 with the execption of the BT pricing issue which they said should be revisited before a decison on signifiant market power was decided.

So.... Ofcom have produced another consultation... lasting just 12 days.... to cover the issue.

Looks like Ofcom have made up their mind and are doing the minimum requirement to comply with the tribunal.

That issue out of the way will allow the mobile termination rates consultation to proceed within the timetable advertised bringing benefits to callers on both mobile and fixed line networks.

[Hands0n]

All of these anachronistic (http://dictionary.reference.com/search?q=anachronistic&x=16&y=21) practises must be remedied if there is to be any further growth in our completely saturated Mobile Telephony market.

The ops may be looking at a short term reduction in [inter-company] revenue, but the gains to be made are significant if they can compete with fixed line costs. They must face it, that the "premium" to be a wireless user is entirely moot these days. And the trend will continue with new wireless [data] technologies which are completely agnostic to the Mobile Telephony model of cost and accounting. Across such networks VoIP surely has to be their biggest challenge and threat.

Imagine, then, a data-oriented network that is as ubiquitously available as our mobile networks of today. The likes of Skype (or their then equivalent) will have the potential to absolutely wipe the floor with the traditional moble network operator with the "free voice" model.

Couldn't happen? Just over 20 years ago the notion of mobile phones for the masses would have been unthinkable (handset price £1,400, voice 50ppm, SMS 60p each)! Things move much quicker these days, so I'd give it less than 7 years.

[3g-g]

Just another article I found about the proposed changes to termination rates, I think the figures here are a bit clearer to understand than the OFCOM bilge!


Calls from fixed lines to mobiles could become cheaper if proposals by the telecoms regulator come into force.

Ofcom's plans follow a review of its regulation of "termination rates" — the current regulation of which are due to expire in March next year.

Speaking to ZDNet UK on Wednesday, a spokesperson for Ofcom said the regulator was following guidelines laid down by the European Commission to investigate any instance of unfair market dominance.

"If I phone your Orange mobile, there's only one company that can connect me to you and that is Orange," an Ofcom spokesperson explained on Wednesday, adding: "We are instructed by the European Commission to do something about that where we find that kind of market dominance."

Termination rates refer to the charges levied by one operator on another, when a customer of one network calls a mobile phone on another network.

The European Commission has recently been taking a keen interest in mobile operators' charges, with particular emphasis on roaming fees — an issue that also relies on termination rates.

Ofcom thinks the current termination system is unbalanced — T-Mobile and Orange, for example, charge more (6.31p per minute) to receive a call than Vodafone or O2 (5.63ppm) — and it wants to gradually "slide" all operators down to a level of 5.3ppm.

As for the 3 network, whose termination rates are not currently regulated at all, Ofcom wants to set a limit of 6ppm as it says it costs more to receive calls on a 3G network.

A spokesperson from Orange told ZDNet UK on Thursday that it welcomed Ofcom's proposals, particularly in terms of the discrepancy between 2G and 3G charges, and "looks forward to responding to Ofcom's consultation to identify a sustainable and fair solution to addressing the call termination issue in the longer term". Sources within T-Mobile expressed a similar reaction.

The changes would not make much of a difference to customers' mobile phone bills, said Ofcom's spokesperson, as the lower charges for phoning another network would be offset by cuts the operator would have to make in its own charges to other networks.

But calls from fixed lines to mobiles should become cheaper. "For example, it will cost BT less to connect to mobile networks and we would certainly expect the savings to be passed on to the consumer in some way," the spokesperson explained.

The consultation on the proposals is due to finish on 22 November and, if adopted, they will be in place by April 2007, to be reviewed again in 2011.

Ofcom also has the wholesale SMS market in its sights — it has promised a lengthy review of the prices charged to send text messages between networks, to start next year.

http://news.zdnet.co.uk/communications/3ggprs/0,39020339,39283321,00.htm

There's a couple of points in bold that caught my eye, the first about the Orange terminating an Orange phone call. I don't understand, if I've read it right. The OFCOM spokesperson says, "...where we find that kind of market dominance". So, is he suggesting that other operators should be able to terminate other rival operators calls? As terminating your own calls makes you dominant in your own network? Is that right? Well duh, I would of thought so. There's no way the operators will allow the termination of their calls by someone else, it leaves it all open to the sabotage of the call by rivals etc. The reason the first ever automatic telephone exchange was invested was because the female operator who was running it (married to a undertaker) was directing all calls to a rival business, to her husbands instead! (Bit of trivia for you there!)

Secondly, an investigation into SMS charges... Oh dear, the operators better think of some good excuses now, 'cos 10/12p for that tiny bit of data to be sent doesn't wash with me, I'm not sure how they'll justify it to OFCOM!

[Hands0n]

It all started out at 60p eeeeee when I were a lad :D

This is all good stuff, more downwards pressure on the pricing is essential. I really fail to see how it costs more to terminate a call to a 3G network as opposed to a 2G network. In the land of Accountability the mobile network operators would be called upon to actually explain that little anomaly. How can that be when we are in the next breath being told that it is cheaper to process calls over 3G due to increased capacity etc... They cant have it both ways, it is either more expensive, or it is not. OFCOM are right to be pulling these jokers tails nice and hard.

I remain to be convinced of the sincerity of the UK cartel of mobile network operators.