MOBILE phone firms have been ordered to slash charges in a ruling by industry watchdog Ofcom.
The regulator said that termination charges, the amount mobile phone firms bill their rivals for handling calls to their networks, will fall by 80% over the next four years, starting from April 1.
But while the new rules were welcomed by campaigners, there were warnings that mobile phone companies may push up the cost of calls and other services – particularly for pay-as-you-go customers – as they look to recoup the revenues they lose from the reduced charges.
Industry leaders O2, Vodafone and Everything Everywhere – which includes Orange and T-Mobile – charge 4.18p a minute to connect calls from other phone companies. But this will be reduced to 2.66p next month and will fall to 0.69p by April, 2014.
Ofcom expects landline operators to pass on the cost savings to customers and for mobile operators to offer more choice of packages.
BT said it intends to pass on the savings to customers as soon as possible and TalkTalk will launch a new deal for customers who want to call mobiles.
But Vodafone warned that some of its pay-as-you-go customers who make few calls may no longer be economically viable and could not rule out increasing the cost of calls.