Maintain the Rate! - Let us keep rates high says O2
by Tom Hall ~ August 11th, 2009. Filed under: In The News, Terminate The Rate.In yesterday’s Guardian Spanish telecoms giant O2/Telefonica has spoken out against moves to reduce mobile termination rates in the UK.
The EU’s call for MTRs that reflect their real costs is an issue for Telefonica across Europe, but thanks to the public and parliamentary support Terminate the Rate has gathered, the UK is likely to be something of a focus.
O2 has dusted off the old arguments about low-users being hit by higher charges and claims that the cost of handsets could rise. These are familiar themes and were last given a good airing in 2002 when the rates were last being reviewed in detail. The good news is that the rates were reduced by Ofcom then and prices came down and more people than ever used mobile phones.
BT and 3 are also accused by O2 of ’self-interest’ in running the campaign. Perhaps O2 and other operators are immune to self-interest. Both BT and 3 are happy to be in a position where self-interest on this issue aligns with that of consumers. 3 has made public commitments to maintain or improve current pricing for low users. O2’s line is essentially that if it can’t get this money from MTRs it must take it from customers elsewhere. Not a particularly consumer-friendly message. Low-MTRs will make real competition a possibility and with real competition, putting up retail voice prices would be an interesting move and not one 3 will be taking. O2’s approach has already invited comment from telecoms experts.
The incumbent mobile operators have always fought the reduction of MTRs claiming that it would result in harm to consumers. Despite the scare stories it hasn’t.
Terminate the Rate is still collecting signatures - add yours here.
I dont think its about cutomers at all, it collides with their needs thou, Its about big companies getting bigger and smaller operators paying the bill for them. O2 and Vodaphone have most customers so theoretically if you call anyone you would have the biggest chance to call someone on those networks, and make them money, more money than the companies that have less customers to call. Beside all that I dont feel good when I know that by calling someone on O2 im giving money to that company… I dont like O2, dont want to give them a penny, and I cant runaway from making them money. And as im paying my monthly bill Id like to think that I bought a right to make phonecalls and recieve them, and why should my money go to o2, when they customers did the same thing… or I should be paing their bills to. Or will have to pay for incoming phonecalls too??
So what if mobile handset prces rise? One of the reasons tariffs are so high is because part of the charges go towards paying off the cost of the hardware. Free handsets promote the wanton replacement of perfectly good equipment for no better reason than it can be done. So to me, even if the mobile companies are right with their scaremongering, then I don’t see it as an issue. We buy what we can afford and get cheaper calls as a result. Another element of the tariff is that of research and development. When mobile usage was in the vast minority, it made economic sense to charge higher rates to pay for this, but these days, we all carry mobiles and therefore the charges paid at all points in the delivery chain are at very unfair levels. The actual cost of delivering a mobile service on a per-call basis is now little different to that of providing landline services and so it is clearly just a profiteering exercise on behalf of the mobile operators to maintain high levels of MTR. If this campaign helps to level the playing field and make costs fairer - to all users - then I support it completely.
On the other hand, I find it very hypocritical of BT that they should be a supporter of the campaign. They claim that if MTR were reduced, then they could include mobile costs in their all-inclusive packages. By this I read it to mean that they need see just a 4p reduction in the charges to bring costs in line with their other provision. If that’s the case, why do they currently charge 7p or 12p per minute to mobile numbers? Perhaps BT are guilty of a little profiteering of their own?