Mobile Termination Rate cut

[Ben]

So it came to pass that the Terminate the Rate campaign saw what they wanted and MTRs will take a massive cut.

There's no doubt that the bigger networks will lose out on revenues from this change, but it was a false, opaque Market anyway and I don't think any of us will be losing sleep over it. Given Three subscribers will be more likely to place a call to another network this change should help them be more competitive.

No network pays an MTR on data, of course. Perhaps this is the underlying reason why Three chose data as a key point of attack over the last few years.

All in all, I'm not expecting any change from the announcement other than in the MNOs' balance sheets.

http://www.mobilenewscwp.co.uk/2011/03/ofcom-cuts-termination-rates/

[Hands0n]

One has to hope that with the MTR coming down that we will see some benefit passed on to the consumer. But the mobile network operators history is one of having to be regulated every step of the way, failing to grasp the simple economics of selling lots very cheap and thereby making shed loads of money in the process. Instead they have wanted to sell everything at a high premium and, if left to their own devices, stifling innovation and competition.

By contrast that impertinent upstart, Three, came along and has been a constant disruptor to the market, sometimes in a large way. Meanwhile France Telecom buys up Orange and latterly T-Mobile joins the gang in Everything Everywhere so reducing the competition in reality if not in name.

Fingers crossed, then, that the lower MTR has a tangible benefit to consumers huh?

[solo12002]

" One has to hope that with the MTR coming down that we will see some benefit passed on to the consumer" @ Hands on and Ben Oh you lot have little faith:

Look what o2 is doing:

https://talk3g.co.uk/showthread.php?8704-O2-simplicity-prices-are-changing&p=42002#post42002

I mean how do they justifie increasing call charges from 20p to 35p out of bundle on top of which there is a lot of talk that their unlimited texts blot on is going up from £5 to £7.50, There unlimted landland calls or o2 Blot on that ppl currently get is being scraped. As it is they have increased the charges for home BB.

Anyone on o2 PAYG I would say look at the new prices from 22March then switch to giffgaff at 8p a call and 4p a text you can also buy goodybagsL

www.giffgaff.com

[Ben]

Those sound like nasty price increases. The big MNOs threatened higher PAYG rates if the MTR was cut... I still don't fully understand why, I think they're implying that the MTR subsidised their PAYG rates, despite PAYG often being more expensive than a contract...? I don't know, it all seems like smoke and mirrors to me.

I doubt any network will be able to up prices too much... there's still a bit of competition left in the UK.

[Hands0n]

Interesting that giffgaff, run on O2's network and owned by O2, can undercut O2 by so much. I think that O2 are trading on their customer loyalty, a rather big gamble in my book. If I were running Three, Vodafone or EE I would be preparing my advertising campaign around about just now.

O2 are completely barking!

[Ben]

They all seem to do this from time to time. Perhaps they're trying to signal to others that now is the time for a price increase; basically they hope to drag the whole market up, even if only a little, knowing that they'll probably have to make some pricing concessions before long. It's a puzzle though, Hands0n, isn't it, how O2 and giffgaff can be using the same physical infrastructure and yet be worlds apart in their tariffs.