ComReg moves to cut mobile termination rates

13-10-2005

by Ciara O'Brien

Calls made to mobile phones could soon become cheaper, thanks to a move to cut mobile termination charges by ComReg.

The communications regulator issued a direction on Thursday, imposing regulatory obligations on Vodafone, O2 and Meteor, as part of its overall market review of the mobile telecoms sector.

As a result of the direction, the three operators are obliged to charge mobile termination rates that reflect the cost of providing the termination service, and will have to justify their costs to ComReg.

Although mobile termination charges are the wholesale rates that telecoms operators pay to mobile operators for calls to their customers' phones, these charges are passed on to customers indirectly, through the call charges they pay. Lowering the termination rates should mean reduced costs for consumers.

"ComReg looks forward to working with the mobile operators to ensure that termination rates are cost-orientated," said John Doherty, ComReg commissioner. "We now believe that in the interim an opportunity exists for the operators to consider further reducing their present rates for the benefit of their customers."

The operators are being given a transition period to adjust their prices.

The battle has been a protracted one for the regulator, with much resistance from telecoms operators regarding its rulings. Mobile operators in Ireland have argued against capping termination rates, claiming that they are already some of the lowest in the EU. In September, Three Ireland won its appeal against ComReg's ruling that it has 'significant market power' over the amount it charges for calls terminating on its network.

ComReg designated Three Ireland as having significant market power (SMP) more than a year ago -- before it launched its services -- a decision that was annulled by the Electronic Communications Appeals Panel (ECAP). The SMP label would have allowed ComReg to fix Three's termination rates.

Eircom, Vodafone and O2 also took the decision to challenge regulatory decisions by ComReg. However, the regulator has warned that these challenges could put development in the Irish market at risk. In its draft strategy plan for 2005-2007, ComReg said that it recognised the right of people to appeal its decisions, but in the interests of "regulatory certainty", legal actions should be concluded quickly.