Mobile Termination Rates - Gaining a consumer perspective
17 September 2009
In order to seek further views from consumer representatives on the importance and impact of mobile termination rates to consumers, Ofcom and the Communications Consumer Panel jointly hosted a round table discussion, on 14 September, with organisations which have responded to the recent Mobile Sector Assessment consultation. The purpose was to explore views in a little more depth and seek comments on alternative ways forward.
Briefly a mobile termination rate is the price paid by the operator of the network from which a call to mobile is made, to the network operator of the person who receives the call. It is intended to compensate the second (mobile) operator for the cost of carrying the call to the person being called. The cost to the first operator is covered by the charge to the person making the first call.
There seems to be universal agreement both with industry and with consumers that this area needs to be regulated and that, in all cases mobile termination rates will continue to fall, which is good news for consumers.
There was also healthy scepticism among the group about some of the claims by those operators who want to see radical change about the extent of current consumer harm, and also about the claims of the damaging effects that might result from changes, by those operators who do not want to see radical change.
The conclusion from the consumer groups present was that this was not the most important topic in telecommunications for their clients, but that there was a specific area of detriment in that it affects text relay services for deaf people and they could see some advantage from lower prices leading to inclusion of calls to mobile in the package deals from BT and other fixed operators. There was however concern that a regulatory intervention to reduce calls to mobile charges to very low levels might have an effect on other consumers if prices were to rise elsewhere to compensate. No one felt confident to predict where and to what extent this might happen. For a fuller description of how this might affect individual groups see the paper from Antelope Consulting (PDF 368KB, opens in a new window) that the Panel commissioned earlier this year.
The consumer groups concluded that in deciding between options, Ofcom should consider four principles.
This is not the biggest issue for consumers and so, to avoid confusion, an evolutionary change is preferable to a sudden one.
- Consumers already find making choices between operators very difficult because of complex tariffs and limited information. Changes should not make this more difficult.
- Ofcom should take into account the wider context, including the impact on competition and innovation.
- Ofcom should consider carefully the effect on particular groups of consumers, particularly pre-pay customers who may not use their phones very much. If any vulnerable consumer groups are adversely affected, Ofcom should ensure that there are remedies to compensate.