Operators say watchdog’s decision is wrong and is likely to result in higher costs for prepay subscribers; both now considering their options
O2 and Vodafone have condemned today’s decision by Ofcom’s to cut Mobile Termination Rates (MTRs) saying there is no evidence that customers will benefit from the decision.
O2 said it was “deeply disappointed” with the decision and called it “discriminatory” claiming there was little or no evidence that consumers would actually benefit from the decision.
Both operators told Mobile News they were considering their options but would not say if these included a legal challenge.
Vodafone chief executive Guy Laurence said: “We are really disappointed that Ofcom has ignored the evidence that termination rate cuts will mean higher costs for pre-pay customers especially at a time when money is tight for many families.”
An O2 spokesperson said:“O2 is deeply disappointed that Ofcom has chosen to peg O2’s mobile termination rate to the ‘pure LRIC’ cost standard.
“It results in charges that are too low. Ofcom continues to regulate other companies, including BT, on other, more generous cost standards and this is discriminatory.
“Prepay mobile customers are likely to be worse off as they are charged to make up the shortfall and there is scant evidence that BT and other fixed companies will pass the lower costs to their customers.”
BT dismissed O2′s statement and promised to pass on call reductions to customers “as soon as possible.”
BT Retail managing director of consumer John Peter said: “Ofcom has made some worthwhile reductions in mobile termination rates, which will benefit customers in the near future.
Our focus is now on developing an all-inclusive package that will enable people to call mobiles from their landlines at no extra cost, with no fear of ’bill shock’.
“This will be incredibly good news for BT’s customers.”
