Ofcom 'to defy EU on mobile fees'

The Commission says mobile firms will be allowed to charge too much

The telecoms regulator Ofcom plans to allow mobile phone operators to charge more than the EU Commission would like, according to the Financial Times.

Ofcom is expected to give price limits for termination charges next week.

Termination charges are the amounts that mobile operators charge each other for taking calls to their networks.

The Commission objects to Ofcom's plans as they are based on the price paid by mobile phones for 3G licences in 2000, rather than their current value.

UK mobile operators spent a total of £22.5bn on 3G licences in 2000, the height of the technology bubble.

But the Commission has urged Ofcom to base its calculations on the current value of the licences, which is likely to be less than the amount paid seven years ago.

Significant income

The Commission says that the Ofcom calculations will mean that UK consumers pay too much for making calls to other mobile networks.

Ofcom proposed last year that termination charges should be limited to between 4.8p and 5.8p per minute for O2, Orange, Vodafone and T-Mobile.

Termination charges account for £2.5bn, or 15%, of the UK annual revenues of mobile phone operators.

Ofcom is legally required to consider the Commission's suggestions, but may choose to ignore them.

The price limits announced next week will come into force in April and run until 2011.

A generous settlement would be welcomed by the operators, who are braced for a cap on the roaming charges that mobile users pay to make and receive calls in other EU countries.