BT And O2 Disagree Over Effect Of Lower Price Phone Calls
BT has described as 'scaremongering' a warning from O2, the
UK's largest mobile phone company and formerly part of the
telecommunications company, that its intended cuts to the
cost of calling a mobile phone could price mobile users from
low-income households out of the market.
Ofcom, is looking at the issue of mobile termination rates
which is the charge levied by mobile networks on each other
and fixed-line operators to connect calls. O2 has warned
that as a consequence the mobile phone companies would have
to raise prices and potentially introduce "use by" dates on
top-up credit.
O2 claim this would be particularly painful for low-income
households and younger consumers as they are solely reliant
on pre-pay mobile phones and many do not have a BT line.
BT claim however that we have been here before, In 2002
when Offcom first proposed limits on termination rates. O2
made similar claims which have been proved untrue with the
benefit of 20 - 20 hindsight, with the usage of prepaid
phones actually rising since that point in time.
BT and the network 3 have joined forces to call for a
scrapping of mobile termination charges through their
"terminate the rate" campaign. Over 70,000 people have
already signed their petition and they have the support of
198 MPs who have expressed their support for an early day
motion calling for rates to be axed.
"The mobile carriers know that excessive mobile termination
rates are unfair, and prevent fixed phone companies from
fairly priced calls to mobiles," John Petter of BT has said.
"It's no wonder that O2 and the other mobile operators want
to hang on to the current regime and are resisting change.
But the sky won't fall."
O2 challenge whether a reduction in mobile termination
rates would actually bring the desired drop in call charges
from fixed-line phones. They say that "In 2007, when mobile
termination charges fell significantly, both BT's and Virgin
Media's [cable] average retail prices actually rose. Mobile
termination charges fell again, significantly, from April
2009, but this has had no effect on BT's and Virgin Media's
standard retail charges; they remain stubbornly high. If
there is a problem in fixed retail markets, it is not one
that lower mobile termination rates would solve."
UK's largest mobile phone company and formerly part of the
telecommunications company, that its intended cuts to the
cost of calling a mobile phone could price mobile users from
low-income households out of the market.
Ofcom, is looking at the issue of mobile termination rates
which is the charge levied by mobile networks on each other
and fixed-line operators to connect calls. O2 has warned
that as a consequence the mobile phone companies would have
to raise prices and potentially introduce "use by" dates on
top-up credit.
O2 claim this would be particularly painful for low-income
households and younger consumers as they are solely reliant
on pre-pay mobile phones and many do not have a BT line.
BT claim however that we have been here before, In 2002
when Offcom first proposed limits on termination rates. O2
made similar claims which have been proved untrue with the
benefit of 20 - 20 hindsight, with the usage of prepaid
phones actually rising since that point in time.
BT and the network 3 have joined forces to call for a
scrapping of mobile termination charges through their
"terminate the rate" campaign. Over 70,000 people have
already signed their petition and they have the support of
198 MPs who have expressed their support for an early day
motion calling for rates to be axed.
"The mobile carriers know that excessive mobile termination
rates are unfair, and prevent fixed phone companies from
fairly priced calls to mobiles," John Petter of BT has said.
"It's no wonder that O2 and the other mobile operators want
to hang on to the current regime and are resisting change.
But the sky won't fall."
O2 challenge whether a reduction in mobile termination
rates would actually bring the desired drop in call charges
from fixed-line phones. They say that "In 2007, when mobile
termination charges fell significantly, both BT's and Virgin
Media's [cable] average retail prices actually rose. Mobile
termination charges fell again, significantly, from April
2009, but this has had no effect on BT's and Virgin Media's
standard retail charges; they remain stubbornly high. If
there is a problem in fixed retail markets, it is not one
that lower mobile termination rates would solve."
