The regulator Ofcom, the self-styled people’s champions when it comes to mobile phone costs, has announced some ideas about reducing mobile termination rates, which actually refers to the wholesale charges that operators impose in order to connect calls to each others’ networks.

The gist of Ofcom’s proposal is that it would oversee a reduction of termination rates over a period of four years. If this happens, maintains Ofcom, then as rates fall, and the operators adapt to such falls, then consumers will get the big benefit from not only cheaper calls, but also greater competition in both the mobile and UK fixed telecoms markets.

And the regulator reckons this could bring about cheaper calls to mobiles for the 30-plus million homes and businesses with a landline.

To look at the prices in greater detail, the proposed Ofcom price reductions mean a drop from an average of just over 4 pence as now, to 0.5 pence by 2015. In fact, the networks 02, Orange/T-Mobile and Vodafone charge 4.3 pence now, whereas 3UK charges 4.6 pence.

Ofcom point out their proposals are against a backdrop of a changing mobile market, especially since they last set termination rates in 2007. Characterizing the mobile phone market nowadays are many operators,
including the likes of the mobile virtual network operators (MVNOs), voice-over IP Providers (VoIP), as well as the national mobile networks. This, says Ofcom, has the effect of providing far more choice and therefore competition, than ever before.

They also highlight the way in which consumers are using their mobile devices in different ways than just a few years ago. Consumers are as likely to connect the internet, send text messages, or send emails, as they are to make calls.

Such is the impact of the modern mobile phone to the consumer, that they are now an integral part of everyday life.

Guest Article by Neil Camp