Mobile charges to be cut following court ruling

Mobile phone calls under some tariff structures will be reduced by up to half following a High Court ruling against Vodafone, Orange and T-Mobile.

On Friday, the three UK phone giants finally lost their fight in a long-running court battle with regulators over the practice of levying of “termination charges”.

The High Court found that the mobile operators were charging too much for calling a BT landline and other network operators.

The finding means that consumers may save around £190 million a year for the next three years.

However, the mobile operators are unhappy with the court ruling brought by the Competition Commission report that proposed price cuts following an extensive review of the cost structures of the mobile phone industry in the UK. Oftel’s analysis of call charge components indicated that “termination charges” accounted for almost two thirds of the cost of a mobile call, and following today’s ruling the mobile phone operators stand to loose a substantial portion of their revenue stream.

In 2001, the mobile operators refused to accept Oftel’s determination that costs should be reduced by around 10% and the matter was taken up by the Competition Commission who conducted a year-long review of the mobile operators call charging components.

The High Court has granted the right for the three of the companies involved to appeal the finding.

Though consumer groups welcomed the determination, the phone companies have warned that there may have to be considerable hike in the cost of handsets.

The price of mobile phone handsets is reduced substantially due to subsidies provided by the operators who then recoup this cost through the call charges.


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