Oftel has made proposals to control the charges mobile operators make for terminating calls to phones on their networks.

Oftel estimates that these controls will save consumers £800 million over four years through cheaper prices to call mobiles both from other mobiles and fixed phones.

The estimated reduction to mobile operators' revenue is £600 million. This figure is lower than the expected cost saving to consumers because Oftel predicts that as prices fall, consumers will make more calls to mobile phones, and operators' profits will go up.

Oftel's proposals come at the end of a year-long review of competition in calls to mobiles. Oftel found as the caller pays the price of calling a mobile phone and has no choice of the network they are calling (the 'calling party pays' principle), the mobile operator has limited incentive to reduce termination charges.

Oftel also found that over the last three years operator's costs have continued to fall and call volumes have increased. As a result termination charges are still above costs.

Consumers on all four networks, as well as fixed line customers,should benefit from these reduced costs. Oftel has therefore proposed to continue with a charge control of RPI-12% for the next four years, that applies to all four operators

Oftel is currently consulting stakeholders on these proposals. If the mobile operators reject them, Oftel will consider referring the issue to the Competition Commission to recommend a solution.

For further information contact Selena Bevis (tel: 020 7634 8844/e-mail: selena.bevis@oftel.gov.uk).