That venerable institution the British Post office is throwing its still not inconsiderable weight behind a campaign to pressure the UK telecoms regulator Ofcom into enforcing major reductions in mobile termination rates, reports Martyn Warwick.
The current price cap regime will expire in 2011 although many think it should be revised immediately. For some months now Ofcom has been inviting submissions from interested parties and that consultation process is due to close shortly. The watchdog has also been lobbied by various signatories to a campaign called "Terminate the Rate" that first hit public awareness back in May this year.
"Terminate the Rate" is the brainchild of two unlikely bedfellows, the incumbent UK telco BT and 3UK, Britain's original, genuine 3G provider. The campaign also has the backing of several bodies representing the interests of small- and medium-sized enterprises, trades unions and members of the general public who, being Brits, can recognise a rip-off when they see one - after all the UK is the breeding and testing ground for them all.
More than 40,000 people have signed the campaign's online petition demanding a reduction in the rates but Ofcom could probably simply ignore the vox populi - after all it has quite a track record for so doing. However, 177 Members of Parliament have signed-up to a so-called "Early Day Motion" that will be moved in the British House of commons.
This demands that the regulator must "take action to reduce excessive mobile termination charges and deliver a better deal for hard-pressed UK consumers" and Ofcom is going to have to sit up and take notice of that.
BT, the prime mover in all of this, says the artificially high mobile termination rates are, in reality, no more than an unjustified - and unjustifiable - subsidy for the UK's Big Four mobile operators, Orange, O2, T-Mobile and Vodafone.
3, meanwhile, complains that the levels of the termination rates is having a markedly adverse effect on its fortunes because they preclude it making the kind of "all-you-can-eat"z offers that have proven so popular in Germany and North America.
And now the juggernaut that is the Post Office is muscling its way into the act. The Post office is a carrier in its own right and more than half a million people subscribe to its home phone service. They will add yet more weight to the growing chorus for change.
Martin Moran, the head of telephony at the Post office says consumers are getting a raw deal because mobile termination rates are set artificially high and that they are "inappropriate and unclear".
Back in 1994, when Ofcom was no more than a gleam in the eye of a deranged and excessively randy milkman, the mobile termination rate stood at the rarified heights of 27 pence per minute, a rip-off par excellence. Currently it's 4.4 pence per minute and will fall to 4 pence per minute by the time the current regime comes to an end in early 2011.
However, and as we all know, the real cost of connecting a call to a mobile network is far less than that - indeed BT maintains it has proof that the actual cost is about .8 of a penny per minute and that, as a result, the Big Four mobile operators are raking in between them an extra £750 million a year thanks to this "subsidy" comprising the imbalance between fixed line call termination rates and the bloated ones pertaining to mobile.
Mobile termination rates are also being assailed by the European Commission. the EC says they are too high and should be pegged at the same level as the fixed line termination rate.
Change is in the wind. Postman Pat will be pleased while his black and white moggy will have a night on the catnip.
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