Regulation’s what you need
Maybe it's because there's a general election coming up, but telco regulator Ofcom had unleashed an unprecedented frenzy of activity this week; yesterday telling Sky what it can do with its content and today telling mobile phone operators what they can charge for using their networks.
There are actually a couple of announcements from Ofcom today. The first is a proposal that, by 2015, operators will only be able to charge each other 0.5p per minute for the use of their networks. These are rather confusingly called mobile termination rates and represent the premium you pay when you call a phone that doesn't use the same network as your one. The current rate is around 4.3p per minute.
The second announcement concerns making it easier to switch from one operator to another, while keeping their phone number. Currently it takes two days and Ofcom says it should take half that. Additionally it's saying the PAC number you need to complete this process should be issued within two hours by text message.
Ofcom justifies the drastic cuts to mobile termination rates by saying they will make it easier for smaller operators and virtual operators to enter the market. It also talks-up how much cheaper calls from landlines to mobile phones will be now, as if saving consumers money is a core part of its remit.
It says the change in the mobile market since it last set termination rates, with mobile data use having tripled, means these measures are necessary. Like yesterday, while it's Ofcom's job to protect consumers, it's debatable whether that remit extends to saving us money per se.
It will be interesting to see how the operators respond to this proposal. They stand to lose a lot of money as a result of it and they're bound to try to recoup it elsewhere.
