A cost reduction in mobile calls

Currently, when a call from a landline to a mobile or a cross network mobile call is made, the receiving network is allowed to make a termination charge of 4.3 pence. This charge is regulated by Ofcom and was originally set up to allow the mobile phone operators to recoup some of the investment costs of their network infrastructure.

On the 1^st April (perhaps not the best date !) Ofcom announced that this charge is to be reduced to 0.5 pence and should come into effect in the first half of 2011.

This is undoubtedly good news in general for users as most will see a cost reduction, but it is very unlikely that the mobile phone operators will just accept this reduction in profit margin. Most mobile contracts come with free handsets or a significant hardware fund which are in essence a subsidy of the monthly costs. In the future these subsidies may become less generous. Similarly each handset is subject to a fixed monthly service charge and this may increase.

The overall impact on users will be complex and all the operators will find different ways of implementing the change to protect their revenues and to make it as difficult as possible to compare the offerings from the networks. However for those wishing to move networks, there is some good news as Ofcom also announced that they are making it quicker to transfer mobile numbers, cutting the time period to just one working day rather than the current two.