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Landline-to-mobile call costs cut by 85 per cent

OfcomThe cost of calling a mobile phone from a fixed line phone will fall by 85 per cent by 2015.

But mobile phone operators have warned the forced price cut will make pay-as-you-go mobile phones more expensive.

The Competition Appeals Tribunal has increased price cuts demanded by communications regulator Ofcom, which will see wholesale call rates drop from 4.18p/minute to 0.65p/minute.

The original cut – to 0.69p/minute – was ordered in April 2011 and will be introduced over the next four years.

In response, BT cut call charges to mobiles last May by 24 per cent in the evenings and by 13 per cent during the daytime.

Ofcom welcomed the CAT ruling and added that it would ‘reduce significantly termination rates which will bring competition and consumer benefits’.

But Vodafone, which will collect less revenue as a result of the cuts, said it had compensated for the loss by withdrawing the subsidy on pay-as-you-go handsets.

Ofcom’s decision and the CAT ruling followed years of wrangling, with landline operators complaining mobile phone termination fees were too high.

Mobile phone operators collect the termination fee from the landline operator for any calls which end up on their network.

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