Ofcom unveils MTR reduction plans for 2015 to 2017

5 Jun 2014

UK telecoms regulator Ofcom has unveiled plans to reduce mobile termination rates (MTRs) further, despite saying that the rate had fallen ‘significantly’ in recent years on the back of its previous intervention. With the rate currently standing at GBP0.0815 (USD0.017) per minute as of 1 April 2014, under the watchdog’s latest proposals it has set out reductions for each of the next three years. As such, from 1 April 2015 Ofcom has said that the MTR will be reduced to GBP0.0515 per minute, before falling to GBP0.0498 per minute and GBP0.0476 per minute at 1 April 2016 and 1 April 2017, respectively. The new rates will apply to all operators.

Having concluded its previous review of MTRs on 15 March 2011, Ofcom has said that in reaching its latest decision there were a number of relevant factors that it had considered. Among those was the fact that between 2011 and 2013 the availability of spectrum to provide mobile services had increased significantly following the regulator’s work on spectrum liberalisation and the 4G auction. Further, it has argued that mobile networks and technologies are also becoming more efficient, leading to lower costs, and has claimed that the new charge controls are designed to ensure that the charges levied by operators reflect these lower costs.

Brian Potterill, Ofcom’s Competition Policy Director, said of the plans: ‘Consumers in the UK benefit from a thriving competitive market, and mobile calls have never been cheaper. The average cost of a call bundle has fallen from GBP40 to around GBP13 in real terms over the last ten years … We want to ensure mobile users continue to benefit from competition, which will deliver affordable services in the years ahead.’

Ofcom’s consultation on the proposals closes on 13 August 2014, and the regulator has said it expects to publish its final decision by March next year.

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