The UK Competition Commission has found that charges by
operators for receiving calls are too high and uncompetitive, and
has set out proposals for action. The Commission has written to the
four mobile network operators (Vodafone, O2, Orange and T-Mobile),
outlining its current thinking, although no formal conclusions will
be made until January 2003. The inquiry follows a referral from the
Director General of Telecommunications in January 2002.
According to the Commission, termination charges (the wholesale
charges made by the mobile operators to other operators for
terminating calls on their networks) are not subject to effective
competitive constraint, and it is not likely that they will become
so in the foreseeable future.
Also, the inquiry has found that fixed-line network operators
were indirectly subsidising mobile network operators. This is
because termination charges were set above costs.
The Commission is looking at ways to impose a price charge cap
on termination charges for all operators. It stressed however that
no final decision will be made at this stage. Further evidence is
being submitted and two further hearings will be held with the main
parties involved.
