British mobile phone users will see a reduction in charges after the communications regulator confirmed today that operators must cut its charges by up to 30 per cent.
Oftel has imposed a one-off 15 per cent cut in the price of calls to mobile phones, followed by further inflation-linked annual price reductions of up to 15 per cent.
Expectations of Oftel's plans sent shares spinning last week, as the cuts in the cost of "termination charges" - the fees phone companies charge rivals to connect calls over their networks - will dent British mobile phone revenues.
But the new price regime is good news for consumers though companies may well challenge the ruling. If they are unsuccessful, users will save £190 million per year to 2006 in calls from fixed-line to mobile phones, Oftel said.
After more than a year of consultations, the regulator said it would impose the new regime from July 25, 2003. Vodafone and mm02 will be forced to reduce call termination charges by inflation - measured by the retail price index (RPI) - minus 15 percent per year after July.
Orange and T-Mobile, whose network runs over a higher frequency than their two rivals, have to reduce their termination charges by RPI minus 14 per cent after July.
The charge controls should run for three years until 2005-2006, Oftel said.
PA