Thursday, 24 March 2011

Ofcom Tells Mobile Phone Networks To Cut Charges

Guest post by Alvina Lopez

Earlier this march, Ofcom finally stepped in and took action against mobile communications companies, namely O2, Vodafone, and Everything Everywhere, requiring them to cut the charges they bill telecommunications rivals to handle calls on other networks by as much as 80 percent starting April 1.

This is good news for landline customers, whose phone calls to mobiles often incur high charges, some of which top out at almost 4.18p a minute. Landline customers can now breathe a sigh of relief when they pick up the phone to ring a mobile user. Over the next four years, charges will drop from 4.18p a minute to 2.66p in April, with the ultimate goal of reaching around .65p in 2014.

Many are pleased, naturally, with the Ofcom ruling, praising it for leveling the playing field for customers and making communication between citizens much more affordable. Landline users could see dramatic reductions in their fees, as landline telecommunications companies pass on the savings to their customers.

However, telecommunications industry insiders warn that this loss of revenue over the next few years may force them to raise charges for other services, including the rates for pay-as-you go customers just so they can recoup the losses. These pay-as-you go customers, according to one source cited in The Independent, often received more calls than placed calls, which generated revenues under the higher termination fees. With this change, however, mobile operators might have to create other fees, such as charging per handset or demanding minimum monthly payments from these customers.

Ultimately, the announcement from Ofcom is good news for users, though time will tell how the telecommunications industry adjusts to the change. Ernest Doku, an expert at, calls this a victory against the "bully boys" but warns "In theory, mobile bills should also come down—but in reality, the networks may look to introduce charges elsewhere to make up for the loss of income."

Alvina Lopez is a freelance writer and blog junkie, who blogs about accredited online colleges. She welcomes your comments at her email Id: alvina.lopez

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