A recent investigation into cross-network UK mobile phone call charges by Ofcom looks set to revolutionise the way mobile phone carriers charge mobile phone consumers for calls between networks. Almost the entirety of the UK mobile network industry is keen to maintain a free market for call charges, yet Ofcom is seeking to implement a cap from 4p to a maximum of 2p per call.
The result of this price cap could cost the mobile industry upwards of £1 billion, potentially reducing the prospect of future financial investment in the industry. At present the likes of BT get hit by a staggering £750 million phone bill each year connecting landlines to mobile phone networks. A cap would appease this problem, but it would create issues for mobile phone carriers who would likely have to bump up pay-monthly subscriptions and consider scrapping pre-pay methods as a result.
Many mobile phone networks could threaten to remove their short and medium term investment in the mobile industry if Ofcom succeeds in implementing such a deal. This could also hamper potential enhancements to the UK mobile broadband services that are continuing to be rolled out on a constant basis.
The drop of termination rates and cross-network call charges could potentially cut the cost of calls to less than 1p per minute. The threat of mobile phone networks pulling out of their investment is realistically likely to force regulators’ hands as they search for some form of ‘middle ground’ agreement.