Orange and Vodafone blame Ofcom for rate hikes

Orange and Vodafone blame Ofcom for rate hikesBack in March we reported on new regulations from Ofcom, effectively lowering termination fees. The fees are charged between networks for connecting calls, but occur “behind the scenes” in that they don’t explicitly appear on your bill.

At the time it was suggested that the new regulations wouldn’t affect mobile users, but now two UK networks have increased their rates as a result.

Both Orange and Vodafone have raised various costs, citing the reduced termination fees as the reason.

A Vodafone spokesperson explains: "This price rise comes after recent regulatory changes. During our discussions with Ofcom over mobile termination rates, we stressed that if the rates came down rapidly and dramatically, the cost of pay as you go was likely to rise as a consequence."

From today, Orange’s minimum call charge on PAYG will rise from 20p to 25p. Vodafone, meanwhile, will raise some of its charges from July 14. On certain tariffs, the minimum call charge will leap from 15p to 25p, with text messages rising from 10p to 12p.

Vodafone is hoping to soften the blow with its Freebees range, while Orange customers can benefit from Extras.

Ofcom’s Elizabeth de Winton defended the regulations, and reckons consumers can still get sweet mobile deals by using price comparison sites.

via: Moneywise

Read more about: OrangeVodafone

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10 comments

Infinite Element  Jul. 1, 2011 at 17:25

Why should a charge that has no relevance to the consumer suddenly affect the consumer?

az87aris  Jul. 1, 2011 at 18:37

Do the charges apply to mobile contacts, ie calls outside of allowance (calls to other networks)?

Although I think the increases are unfair to start with it's only an extra 5p on Orange, how can Vodafone justify an increase of 10p?

There are times when I get fed up with o2, but this is one of the occasions where I am actually glad to be an o2 user!

zhuchuntao  Jul. 1, 2011 at 19:54

I dont know

Wraggy  Jul. 1, 2011 at 20:25

Why are PAYG users penalised for something that affects contract users? Bit unfair if you ask me...

bryan2411  Jul. 1, 2011 at 23:10

not so many Freebies from vodafone.....

giggidygoogly1  Jul. 2, 2011 at 09:04

vodafone are beyond caring about customers.
they renegotiated £5-6 billion in taxes and then as of 1st november 2011 are taking all of its british call centre work to egypt.
they may have a problem when their customers find out!
the ones i have mentioned it to are not fans.
currently their iphone/pad dept and technical are over there but will be everyone!

Infinite Element  Jul. 2, 2011 at 10:34

Wraggy: "Why are PAYG users penalised for something that affects contract users? Bit unfair if you ask me..."

Termination fees occur when a customer on one network contacts a customer on another network. So, it does apply to PAYG. But what I can't work out is how Ofcom and the networks couldn't have worked this out between them rather than have it suddenly affect PAYG customers.

I would normally say Ofcom should look into this, but they are the culprits apparently!

Andy247  Jul. 2, 2011 at 11:10

Profiteering at it's absolute worst, they've increased prices by significantly more than the reduction in Mobile Termination Rates. they've also only targeted PAYG because the price increase would be detrimental to contract customers and allow them to cancel free of charge.

Wraggy  Jul. 3, 2011 at 13:25

Infinite Element: Termination fees occur when a customer on one network contacts a customer on another network. So, it does apply to PAYG.

Think I missed out an "also" which would have made my point make a bit more sense! Surely these termination charges [i]also[/i ]apply to calls made by contract users, but there doesn't seem to be any indication that any out-of-bundle charges and/or overall monthly costs for contract users will increase at the same level. That's why I thought it was a bit unfair.

jezcooke  Jul. 5, 2011 at 17:32

Think I missed out an "also" which would have made my point make a bit more sense! Surely these termination charges [i]also[/i ]apply to calls made by contract users, but there doesn't seem to be any indication that any out-of-bundle charges and/or overall monthly costs for contract users will increase at the same level. That's why I thought it was a bit unfair.

I think the difference is that contract users provide the network with a guaranteed income so the termination charges are a less significant revenue steam in these cases, whereas with PAYG a phone could be sitting on their network rarely being topped up and as such inbound calls would likely account for a much bigger proportion of the income made by a PAYG phone.

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