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Last Updated: Tuesday, 7 June, 2005, 12:50 GMT 13:50 UK
Consumer anger over mobile fees
Mobile user
Consumer groups say phone users are still being overcharged
Consumer groups have criticised proposed cuts in connection charges for calls from other mobile networks, saying the cuts do not go far enough.

Telecoms regulator Ofcom is planning to reduce the so-called 'termination' fees which mobile firms levy on calls from other networks and fixed-line phones.

Consumer groups say that the charges of 6 pence a minute are still far too high and should be cut to 3p a minute.

Vodafone, the UK's leading mobile firm, said it was satisfied with the outcome.

Ofcom imposed limits on the amount the UK's four largest mobile phone firms could charge for connecting incoming calls last year amid claims that consumers were being ripped off.

The regulator decided on Tuesday to extend price controls until March 2007 and reduce the existing limits on what firms can charge.

Mobile companies will not reduce their prices voluntarily
Bill Mieran, Telecommunications Users Association

Charge caps on calls to Vodafone and O2 phones will be cut from a maximum average amount of 8p per minute to 5.63p while those on calls to T-Mobile and Orange will fall from 9.5p per minute to 6.31p.

'Disappointing'

However, consumer groups reacted angrily to the proposals, arguing that charges should be cut to 3p a minute.

They claim that average phone users - who pay the connection charges on top of the cost of a call - are being overcharged by up to 10 a month under the current regime.

Bill Mieran, chairman of the Telecommunications Users Association, said Ofcom's decision was disappointing.

"These termination charges need to be regulated on a downward trend," he told the BBC.

"Mobile companies will not reduce their prices voluntarily. They never have and they never will."

We are reasonably pleased with what Ofcom has said
Vodafone

Prices have fallen by about 30% since controls were imposed last year, a decision which followed a bruising legal battle between the telecoms industry and Oftel, Ofcom's predecessor.

The industry referred the regulator's initial decision to the Competition Commission and then unsuccessfully sought to have it overturned in the High Court.

Further deregulation?

Ofcom says its proposals take into account consumer demand for mobile phones and the industry's investment in new products and technology.

The UK's leading operators have argued that they have invested in new services and deals for customers and that fierce competition was bringing prices down anyway.

"We are reasonably pleased with what Ofcom has said," a Vodafone spokesman told the BBC.

Ofcom is under growing pressure, including from some sections of the industry, to abolish charges altogether.

Some firms are believed to feel that complete deregulation will allow them to compete on connection charges as well as call rates.


SEE ALSO:
Costs of calling mobiles to drop
01 Jun 04 |  Business
Q&A: Mobile phone price cuts
24 Jul 03 |  Business
UK mobile bills set to fall
24 Jul 03 |  Business
Phone charges to be cut
27 Jun 03 |  Business


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