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Ofcom rate cut may hit pay-as-you-go customers

News that Ofcom’s reduction in how much networks have be able to charge to call each-other should have us leaping out of our seats, imagining tumbling phone-bills, and all the new gadgets, clothes, boats and planes we can buy with our new-found wealth. But that may not be the case, according to some of the phone networks. We canvassed the big networks on their opinions.

An O2 spokesperson said “We are deeply disappointed with Ofcom’s decision, especially considering the tough economic climate. Pre-pay mobile customers are likely to be hardest hit as they are charged to make up the shortfall.”


Vodafone’s spokesperson, said that they were, “really disappointed with the announcement. Ofcom have ignored the evidence of cuts will increase costs for pre-pay customers, at a time when money is particularly tight. We are studying Ofcom’s decision, and considering our options.”

Everything Everywhere (Orange and T-Mobile) sent us their position in email, and also suggest that their PAYG customers could get hit.“We are disappointed with Ofcom’s decision and are currently reviewing the detail and our position as to whether we will appeal. Our concerns focus on the impact of the decision to our vulnerable pay-as-you-go customers.

“By applying pure LRIC (long-run incremental costs) methodology in setting call termination rates going forward, Ofcom has suggested we recover a larger share of our costs from retail charges. This may force us to change the pay-as-you-go model as we know it, as a large number of these customers will now become uneconomical – making the way our consumers currently buy, use and enjoy their mobiles radically different going forward.”

Three Mobile, one of the partners of the campaign to reduce the cost of mobile termination rates, and naturally, had a slightly more positive response.

Their spokesperson told us that, “Mobile termination rates (MTR) have been coming down for years and every time a reduction is proposed the big operators dust off the same old argument, that prices must rise and the vulnerable will stop using their phones.”


“Yet each time MTRs are cut, consumers get a better deal and the number of mobile users has grown. The faster and further the rates come down the more competitive this market will be.”

That’s fighting talk. So it looks like we could see changes to how pay-as-you-go phone users are charged in the near-future. More on this as it develops.


 

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