Ofcom has announced that termination fees are to be lowered over the next four years, ultimately resulting in cheaper calls for UK consumers.
Termination rates are charged between networks for connecting calls. For example, if you’re on Orange and you call someone on O2, a termination fee is incurred. It’s not visible on anyone’s bill as a separate charge, but providers build these costs into their tariffs.
Ofcom aims to reduce the current rate of 4.3p per minute to 0.5p per minute by 2015. Mobile networks claim that the termination rates are vital, but Ofcom points to a recent reduction in the number of calls, as more people use text and data.
In fact, Ofcom reckons data use has increased by 200% over the past year. That figure encompasses calls made using the likes of Skype and Viber, which allow users to speak for free using their data connections. Ok, free if you have a data allowance.
Mobile users mightn’t notice an impact with the rate reduction, but the 32.7 million landline users in the UK will be able to make substantially cheaper calls to mobiles.