3 and BT launch campaign to cut mobile call costs
“Terminate The Rate” campaign aims to reduce call termination fees
20 May 2009 12:18 GMT / By Duncan Geere
High up at the top of the BT Tower in London, BT's John Petter is upset. He feels that the current system for charging for mobile phone calls is "profoundly unfair and extremely outdated”.
He's annoyed because the costs, he says, are too high for consumers. Flanked by representatives from the NUS, 3, GMB, Federation of Small Businesses, and Carers UK, who support the campaign, he's here to launch a new campaign to reduce call termination fees - "Terminate The Rate".
Mobile termination rates are fees that are charged when a customer of one network calls another. For example, if you call an O2 phone from a BT landline, then O2 charges BT a termination rate – 4.3p per minute. Landline termination rates are much lower – 0.3p per minute.
The fees came about back in the late 90s when mobile networks were still small companies and needed to fund aggressive expansion and the building of masts. Now that's occurred, 3 CEO Kevin Russell argues, the rates should be brought down to their true cost – around 1p.
Ofcom is due to undergo an EU-mandated "serious look" at the current system for mobile call charges in 2011, so these groups are launching this campaign to bring pressure on Ofcom and raise public awareness of how much cheaper calls could be if terminate rates were cut.
3 CEO Kevin Russell claims that if rates were cut to 1p, then his company could offer unlimited calls, texts and internet for £35 a month. Currently that sort of package costs far more.
These companies aren't being totally selfless - there's an element of self-interest, too. 3 has paid over £200m in termination rates to date to the other big four mobile networks. He freely admits that BT is subsidising his company, thanks to the fees that 3 charges BT for terminations.
The coalition wants as many people as possible to sign a petition, which is available on terminatetherate.org, though at the time of writing it doesn't seem like all the links on their site are fully working yet. If you have trouble, try again later on.
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