Ofcom decision on wholesale mobile voice call termination

On 19 May 2011, the Competition Appeal Tribunal published summaries of appeals lodged by four operators – British Telecommunications plc, Vodafone Limited, Hutchison 3G UK Limited and Everything Everywhere Limited – in respect of Ofcom’s decision of 15 March 2011 with respect to wholesale mobile voice call termination rates that will apply from 1 April 2011 until 31 March 2015. Ofcom has decided to adopt a control based on the incremental cost of terminating a call (known as pure LRIC). This amends the previous control that was based on the incremental cost of terminating a call plus a mark up to take account of joint and common costs (otherwise known as LRIC+). Ofcom considers that the decision should reduce mobile termination rates from approximately 4.18ppm in 2010/11 to 0.69ppm by 1 April 2014. In addition, as part of the decision, Ofcom has placed a requirement on the four national mobile communications providers not to unduly discriminate in the provision of mobile call termination.

Some of the competition issues raised by this decision are discussed in the “The day of the discounts”, a newsletter article looking at price differentials between retail on-net and off-net calls of providers.

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