In the event that new controls are considered necessary, Oftel will consider whether the new controls should apply to all mobile operators.
The current price controls were set in 1998 following a reference by Oftel to the Monopolies and Mergers Commission (now the Competition Commission). The Commission concluded that the level of charges were too high.
The current controls on calls to BT Cellnet and Vodafone’s networks have already reduced call termination charges by 33%.
Oftel will review the extent of competition in the provision of incoming calls in order to assess if new controls should be introduced when the current ones expire in 2002, or if other regulatory action is appropriate.
The review fits in with Oftel’s strategy to ensure that regulation is appropriate to the level of competition in the market.
David Edmonds, Director General of Telecommunications, said:
Around two-thirds of the price consumers pay for calling a mobile phone on another network is made up of the termination charge the portion of the price which their operator pays to the other mobile network.
Oftel’s current price controls should save UK consumers £1 billion over three years.
The mobile market has grown significantly since the current charge controls were introduced in 1999. I want to establish whether competition has developed sufficiently to keep prices down when the current controls expire in 2002. Otherwise further regulatory action may be needed to maintain the best deal for consumers.
The consultation will not deal with third generation mobile telephony. Oftel considers it would be inappropriate to propose measures now to regulate call termination on third generation networks as it is not clear how these networks are going to be used and whether competitive pressures will be adequate to constrain charges.
