Cheap phone calls for all

PHONE call charges are set to be slashed by up to 80 per cent in a major victory for campaigners.

The charges make up 80 per cent of the cost of calling a mobile The charges make up 80 per cent of the cost of calling a mobile

Industry regulator Ofcom has ordered the country’s big four national operators to cut the amount they charge customers for phoning a mobile from another network or a landline.

The ruling will mean call costs will be cut by 64 per cent overall, shaving a massive £23.67 off the average monthly mobile bill of £36.41.

The ruling comes after the Daily Express exposed the high charges – effectively a secret stealth tax – in 2009, which prompted Ofcom to launch its inquiry.

Mobile phone operators Three, O2, Everything Everywhere (Orange and T Mobile) and Vodafone currently charge up to 4.48 pence per minute to dial a mobile from a landline or a different network – even though it costs them less than a penny to connect the call.

The charges make up 80 per cent of the cost of calling a mobile. And they have allowed providers to rake in more than £2.5billion a year in fees known as mobile termination rates. Ofcom has now said that from April 1 the fee must be cut to 2.66 pence. By 2014 this will be reduced to just 0.69 pence, saving consumers billions on phone bills each year.

Ofcom has made worthwhile reductions in mobile termination rates

John Petter, managing director Consumer, BT Retail

All phone users will benefit as the cost of making calls between different mobile networks, as well as call from landlines will be reduced.

Campaign group Terminate The Rate fought the high charges, with the backing of 161,000 signatories, 260 MPs and several industry bodies including BT and Three.

Ofcom says in its ruling that while mobile phone companies may lose some money from the reduction in termination charges, they were all benefiting from customers using more data services, such as text messaging and accessing the internet from their handsets.

A spokesman for Terminate The Rate, said: “This is a win for consumers. The Daily Express was quick to recognise Mobile Termination Rates as a consumer issue and we appreciate the continued support.”

John Petter, managing director Consumer, BT Retail, said: “Ofcom has made worthwhile reductions in mobile termination rates. We want people to be able to call mobiles with no fear of bill shock.

“Through our campaign and the support of the Daily Express, this will soon be a reality.”

He said it would “signal a major, beneficial change in the form of lower prices for telephone users and greater competition”.

Margaret McDonagh, Labour’s former general secretary, said: “I think this is a great decision by Ofcom. It will reduce the cost of phone calls for many, which has to be a good thing. It should also make our phone bills more predictable and that’s really important when you are on a tight budget.

“None of us wants to get a shock just by opening an envelope. Good on the Daily Express for supporting this campaign on behalf of their readers.”

Mike Wilson, mobile manager at moneysupermarket.com said: “Today’s announcement is what hard-pressed customers have been waiting for. They will finally get a fairer deal on their landline to mobile and cross network mobile calls.

“For too long consumers have paid over the odds for the calls they make and from April the charge applied will be significantly cheaper, and will continue to be reduced over the next three years.”

Ofcom said it expected most telecoms companies to pass the savings on to their customers.

A spokesman for the Three network said: “While we wanted more decisive action from Ofcom, the promise of lower rates secures great deals and more generous pay-as-you-go offers. Any deal that lowers wholesales rates like this is pro-competition.”

But Vodafone, which has 18.5 million customers in the UK – more than a quarter of all mobile phone contracts in the country – said it would not rule out increasing the cost of calls.

Its UK chief executive Guy Laurence said: “We are really disappointed that Ofcom has ignored the evidence that termination rate cuts will mean higher costs for pre-pay customers, especially at a time when money is tight for many families.”

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