UK regulator Ofcom has said it will extend its current pricing controls on mobile operators for a further year, pending further analysis into mobile termination costs.
Currently, 2G operators are obliged to meet pricing controls enforced by Ofcom in September 2004 until 31 March 2006. But even though the period of the pricing control would be extended, the prices will not remain the same. Ofcom plans to introduce a new pricing control for the period 1 April 2006 until 31 March 2007. Ofcom will determine the new pricing controls using the market analysis that took place in 2004. It has said it will postpone further market analysis until 2006.
Industry watchers said the most likely cause for the delay was to wait for the result of Hutchison 3G’s appeal to the Competition Appeal Tribunal against Ofcom’s 2004 decision that it represented a Significant Market Power.
Tony Lavender, Director of Telecoms Research at Ovum, said the pricing controls did not really represent “any great upset within the mobile market”.
He was more surprised that the means by which Ofcom arrived at any changes would be by the same methodology as in 2004.
Ofcom stipulated that for Vodafone and O2, which use both the 900MHz and 1800MHz bands, termination costs must come down to 5.63 pence per minute, down from 8 pence per minute prior to September 2004; and
T-Mobile and Orange , using bands at 1800MHz must charge 6.31 pence per minute, down from 9.5 pence per minute in September 2004.
Although 3 has been adjudged to have SMOP, it s costs are not stipulated by the regulator.