After yesterday"s thinly disguised threat by O2 to the effect that if either the UK telecoms watchdog Ofcom or the European Commission push through new regulations to trim mobile termination rates, prices could rise elsewhere to such an extent that the poor may not be able to afford mobile handsets or services, BT, has joined the fray and called the ploy "scaremongering", reports Martyn Warwick.
In its submission to Ofcom as part of the ongoing "consultation exercise" about the future of mobile termination rates, O2 wrote that, if further regulation is imposed, mobile operators would, inevitably, have to raise prices in other areas to make up for the resultant financial shortfall.
That submission has let slip the dogs of war and this morning, the MD of BT's consumer arm, John Petter, writes. "In 2002 when Ofcom first proposed to impose controls on mobile termination rates O2 warned that this would 'severely damage or even put to an end the prepaid customer sector on which many vulnerable customers, particularly less well-off customers, relied... potentially resulting in the loss of many millions of existing and potential mobile subscribers'."
He continues, "We've been here before but, in the end the sky did not fall in and mobile penetration and usage continued to rise.
O2's predictions are no better a guide to the future now than they were in 2002."
Turning to BT's beliefs and strategy, John Petter says, "When mobile termination rates were first controlled BT made a voluntary undertaking that it would pass on the value of the reduction to its customers in lower prices and we demonstrated to Ofcom's satisfaction that we did do so. For the future we would like to offer our customers lower-priced calling plans in which the cost of calling mobile phones was capped or included in unmetered bundles, but the current level of mobile termination rates makes this impossible."
He adds, "They [the mobile operators] know that excessive mobile termination rates are unfair, distort competition and prevent us and other fixed phone companies from offering low-priced calls to mobile, It's no wonder that O2 and the other mobile operators want to hang on to the current regime and are resisting change.
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