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Lower mobile rates to benefit consumers

Lower mobile rates to benefit consumers

Category: Mobile Phones

Updated: 15/03/2011
First Published: 15/03/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Calling mobile phones should soon become a less expensive affair, after the telecoms regulator cut fees that operators can charge.

From the beginning of April, Ofcom will place a cap on rates charged by all four mobile network operators.

Known as termination rates, anybody ringing a mobile phone – whether from a landline or another mobile – is charged for being connected.

Currently, consumers are charged between 4.1p and 4.4p to have their call connected to another network, but this will fall to just 0.69p over the next four years.

Ofcom has said that it expects the savings to be passed on to consumers.

The European Commission has recommended that Ofcom force mobile operators to slash their costs to 0.69p by 2012, but the regulator has opted for a longer timeframe.

With the explosion in smart phones, the way consumers use mobile devices has changed in recent years.

Data rather than voice calls form the majority of traffic over mobile networks as first text messages and more recently browsing the web have become more popular than traditional calls.

Figures show that the volume of data traffic over mobile networks has increased by 104% in the last year alone.

"As mobile termination rates only apply to calls rather than data, over the four year charge control period, they are likely to become a less significant element of mobile companies' revenue," said Ofcom

"Data revenue increased by 90% between Q4 2007 and Q4 2009 and Ofcom expects continued data revenue growth in the future.

"Therefore Ofcom expects that investment in the UK mobile sector will be driven increasingly by the growing appetite for data services, smartphones and mobile broadband.

"Ofcom does not expect lower mobile termination rates to materially change this trend."

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