March 15, 2011 / 8:06 AM / 9 years ago

UPDATE 1-UK cuts cost of connecting calls across networks

* Ofcom says expects savings to be passed on to consumers

* Charges by main operators to be limited to direct costs * Cap drops to 2.66 p/minute from April, 0.69 by 2014/2015.

(Adds details)

LONDON, March 15 (Reuters) - British telecoms regulator Ofcom will reduce the amount mobile operators can bill for connecting to their networks, cutting charges by 80 percent over four years among the main players.

Ofcom said that from April 1 the four national network operators 3UK 0013.HK, O2 (TEF.MC), Everything Everywhere (DTEGn.DE)FTE.PA and Vodafone (VOD.L) faced a reduction in so-called termination rates — the wholesale charges that mobile operators impose to connect calls to their networks.

The changes would, among other things, reduce the cost to landline companies of connecting calls to mobile networks, the regulator said on Tuesday.

“Ofcom expects these savings to be passed on to consumers in the competitive UK landline market,” it said in a statement. “Some operators have already promised to lower their charges.”

Ofcom said the new rules should also result in more choice, introducing more pricing flexibility into the market and resulting in a greater range of packages available to customers.

For the four main operators, Ofcom said it would set rates by only taking into account the costs incurred directly from accepting calls from other networks. For 28 other smaller providers or new-entrants, Ofcom said it would set rates on a “fair and reasonable” basis.

For the leading operators, the current cap will drop from as much as 4.48 pence per minute to 2.66 pence per minute from April 1 and to 0.69 pence by 2014/2015.

Reporting by Paul Hoskins; editing by Paul Sandle

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