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Cheaper calls

Mobile firms due to cut costs

The UK's mobile phone firms are due to start cutting call charges today to abide by a ruling set by the Competition Commission. But whether this will have much effect on the total costs paid by mobile users is uncertain.

The cost of calling from one mobile network to another should fall from 24p to 19p a minute over the next three years, while landline-to-mobile calls are set to drop from 17p to 12p per minute. Mobile operator Orange today announced a series of price cuts on its wholesale charges.

But these are the prices paid by one operator to another; customers can pay as much as 60p per minute, with landline-to-mobile calls costing up to 40p per minute.

Vodafone reduced mobile-to-mobile call charges back in April from 50p to 30p per minute, a huge saving of 20p per minute, but rival Orange has refused to follow suit.

Under the Commission's proposals, prices for consumers should keep falling over the next three years. However, mobile operators, whose own costs will not drop, are not keen to comply with these terms.

"The regulator has no place in interfering in an already competitive market and we will continue to resist these changes," said Orange's Sarah Taylor.

The worry for mobile users is that operators will look for other ways to recoup their lost revenues - perhaps by hiking prices for other service such as SMS and MMS or even by increasing handset prices.

"We aren't looking to raise the prices of MMS and SMS service [for instance] but we have already raised handset prices," said Anna Cloke, head of corporate communications at Vodafone. Cloke is sure that operators will find ways to make their money back, creating a balancing act whereby customer sacrifice cheaper handsets for cheaper calls.

BT, which was given the option to postpone the implementation of changes, will not be introducing any price reductions until October.


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