UK mobile bills set to fall

British mobile phone firms are due to start cutting their call charges on Thursday in order to comply with a ruling from the competition watchdog.

The cost of calling from one mobile network to another should fall from 24p per minute to 19p over the next three years, while the cost of landline to mobile calls should fall 5p to 12p per minute.

The average monthly phone bill is expected to fall by £18 over the same period, according to telecoms industry regulator Oftel.

MOBILE PRICE-CUTS EXPLAINED How much could you expect to save?

The reduction in call charges follows a Competition Commission inquiry last year which concluded that mobile companies were charging customers too much to connect calls from a landline or different mobile networks.

The four big British mobile companies - Vodafone, MMO2, T-Mobile and Orange - are expected to cut the cost of calls from landlines by 15% from Thursday.

Over time, says Oftel, the reduction in what telecoms firms charge each other - known as termination charges - will feed through to consumers in the form of lower bills.

Consumer groups have welcomed the price cuts, particularly for landline customers calling mobile phones which hits those on low incomes hardest.

Good news, bad news

BT won't be following suit until October, blaming mobile phone firms for the delay.

However, mobile operators may make up for the price cuts by increasing charges for other services, meaning that the consumer may ultimately be no better off.

Some mobile operators have threatened to put up the price of handsets, while others may increase the cost of using the latest mobile services such as picture messaging.

But a Vodafone spokeswoman told BBC News Online that firms would suffer if they were too quick to raise prices.

"Competition in the sector is tremendous and... in time, handset charges could come down rather than go up."