CAT rejects O2 UK’s appeal on Ofcom’s handling of MTR dispute

31 Oct 2012

The UK’s Competition Appeals Tribunal (CAT) has issued its judgement on an appeal made by mobile network operator O2 UK regarding telecoms watchdog Ofcom’s handling of a dispute between the cellco and two other operators – Vodafone UK and Hutchison 3G UK (H3G) – related to mobile termination rates (MTRs).

In its summary of its decision, the CAT noted that the dispute was connected to termination charges levied by Vodafone and H3G in October 2010, and in particular a practice known as ‘flip-flopping’, which it described as ‘a means by which mobile communications providers exploited the way in which average call termination charges were calculated under Ofcom’s mobile call termination statement published on 27 March 2007’.

In rejecting the appeal the CAT said it had reached a number of conclusions, including that Ofcom had considered whether the October 2010 charges were fair and reasonable in line with its regulatory duties and objectives, and in light of the prevailing regulatory regime. The Tribunal noted: ‘There was no error in law on Ofcom’s part in giving predominant weight to Vodafone’s and H3G’s putative compliance with the significant market power (SMP) regime, and in the absence of any error of law the weight to be attached to relevant factors was a matter for Ofcom alone … In the absence of any specific complaint of non-compliance with the SMP regime, Ofcom was free to decide whether to investigate that aspect of the matter, or whether to proceed on the assumption that the disputed charges, viewed in the context of the financial year as a whole, complied with the charge control. In the Tribunal’s judgment, it was eminently reasonably for Ofcom to decide to proceed on the latter basis.’

United Kingdom, Hutchison 3G UK (Three UK), O2 UK, Ofcom, Vodafone UK