Three has written to the Competition Appeal Tribunal highlighting the flaws in their claims and reinforcing the benefits of low MTRs.

Since Ofcom outlined its proposal to lower MTRs in April 2010, Three has introduced The One Plan which offers 2,000 any network minutes, 5,000 Three-to-Three minutes, 5,000 texts and all-you-can-eat data for £25 per month.

For occasional Pay As You Go users, Three has a 13p per minute plan which offers credit that does not expire.

Earlier this year, Ofcom decided that MTRs will fall over a period of three years coming down to 2.66p in 2011, 1.70p in 2012, 1.08p in 2013 arriving at 0.69p in April 2014. Ofcom will adjust these figures for inflation, meaning that from April 2011 MTRs will come down to 2.98p with an eventual rate of around a penny.

The final determination of the Competition Commission is expected to be published in Q1 next year.

You can find the Telegraph article by following this link: http://tinyurl.com/5rnf7rj

In the evening, the cost of calling a mobile on all major networks from a BT landline fell from 7p per minute to 5.3p, a 24 per cent cut. During the day, the cost fell from 13p per minute to 11.3p, a 13 per cent cut. This adds extra pressure on companies such as Sky, TalkTalk and Virgin Media who have yet to pass on the savings achieved through the Terminate the Rate (TTR) campaign. Virgin in particular currently charges 31.61p per minute for daytime calls to customers on 3’s network and 19.35p per minute for daytime calls to other mobile operators.

The Terminate the Rate campaign led to Ofcom cutting MTRs and, as promised, BT is now passing on the first of those savings to its customers. BT is also planning to launch the UK’s first ever all-you-can-eat calls package that includes calls to mobiles.

John Petter, managing director, Consumer, at BT said: “Having campaigned for two years to get Ofcom to lower mobile termination rates, I am delighted to pass on the news that calls to mobile phones from a BT landline are to cost a great deal less. We are passing on Ofcom’s reduction and what’s more we’ll soon be telling customers how they can stop worrying about call charges from landlines to mobiles with a new, inclusive consumer calling package. Watch this space.

Everything Everywhere, T-Mobile and Orange’s joint venture, along with Vodafone have filed appeals to the Competition Appeals Tribunal in a bid to undo Ofcom’s move to lower charges. They argue that Ofcom has got both the model and their sums wrong. Essentially they want to be able to roll in other costs not related to call termination and argue that Ofcom is not allowing them to charge what it cost them to terminate calls, anyway.

The Terminate the Rate Campaign continues to call on Ofcom to reduce the cost of MTRs to their true cost, which we believe is lower than Ofcom has indicated.

Terminate the Rate Campaign members BT and Three have also lodged an appeal. Three’s appeal argues that the rates have been set too high. BT argues that mobile operators made windfall profits from MTRs that should have been addressed by a lower initial rate and that the four-year glidepath should be three years instead.

Both BT and Three’s actions support the direction of Ofcom’s MTR reductions and argue they should go further.

Like Ofcom in the UK, Arcep has based its decision on the pure LRIC cost model which doesn’t allow MTRs to be inflated beyond their actual cost. However, the glide path proposed by the French regulator will see these charges fall quicker and over a shorter period of time. UK consumers will have to wait until April 2014 to experience the full effect of lower MTRs. Which begs the question: why do British consumers have to wait?

This draft decision is in accordance with the European Commissions recommendation, and in line with the remarks issued by the commission on the particular situation in France.

Although these charges are higher than those outlined in Ofcom’s proposal, and consumers will have to wait a full three years to experience the full benefits of low MTRs, this is still good news for UK consumers. In the long term all UK mobile phone users will benefit from cheaper calling charges to mobiles as a result of today’s decision.

A spokesman for the campaign said: “Ofcom has acknowledged that lower mobile termination rates are better for consumers and committed to reducing them to less than a penny, which raises the question: why can’t those benefits be realised sooner? In the long term, this is a win for consumers: cutting mobile termination rates supports competition and better deals for all that call mobiles.”

Terminate the Rate launched back in May 2009 with one single goal: to make the cost of calling a mobile fairer for everyone. Ofcom’s final decision on this matter has proven that we were listened to and I would like to thank the hundreds of thousands of UK consumers that signed the petition, the 262 MPs that signed the Early Day Motion as well as the 65 organisations that supported us along the way. Without such incredible consumer support, the campaign wouldn’t have had such a positive impact.

Please do continue to visit this site for all the latest information. As soon as the announcement is made, we’ll let you know!

To recap: On 1st April 2010, Ofcom announced a proposal to reduce MTRs from April 2011. The drop in MTRs will take place over a period of 4 years, coming down to 2.5p in April 2011, 1.5p in April 2012, 0.9p in April 2013 and eventually arriving at 0.5p in April 2014. The proposal means that consumers will have to wait until 2014 to experience the full benefit of lower termination rates. In comparison, the European Commission wants MTRs to fall to 0.5p by the end of 2012.

We hope that Ofcom will confirm the plans laid out in the proposal – or better – and not buckle under pressure from the ‘big three’ operators. They, unlike Three and BT, love high MTRs as they bring in a huge amount of revenue as well as prevent competitive pressure from lower prices.

Thank you once again for supporting the campaign. We now have over 161,000 signatories from UK consumers to the petition and we will continue to grow until the changes we want are implemented.
We will post another blog post as soon as Ofcom has released details of its decision. In the meantime, please do continue to check the website as well as follow us on Facebook and Twitter.

To recap: On 1st April 2010, Ofcom announced a proposal to reduce MTRs from April 2011. The drop in MTRs will take place over a period of 4 years, coming down to 2.5p in April 2011, 1.5p in April 2012, 0.9p in April 2013 and eventually arriving at 0.5p in April 2014. The proposal means that consumers will have to wait until 2014 to experience the full benefit of lower termination rates. In comparison, the European Commission wants MTRs to fall to 0.5p by the end of 2012.

We hope that Ofcom will confirm the plans laid out in the proposal – or better – and not buckle under pressure from the ‘big three’ operators. They, unlike Three and BT, love high MTRs as they bring in a huge amount of revenue as well as prevent competitive pressure from lower prices.

In the run up to the announcement, please do continue to check the blog for further information. We will be communicating with all of you that signed the petition and asked for more information as soon as we have any updates.

In the meantime, I would like to thank you once again for supporting the campaign. We now have over 161,000 signatories from UK consumers to the petition and we will continue to grow until the changes we want are implemented.

On behalf of the team, I would like to wish you all a Merry Christmas and Happy New Year!

Berger asked Vaizey at what level he expects MTRs to be set by January 2012 and, perhaps more significantly, what discussions he has had with Ofcom on proposals to speed up the reduction of mobile termination rates. Unsurprisingly, in response Vaizey summarised the process and merely reiterated the fact that:

“Ofcom are considering submissions received from consumers, consumer groups and operators and they expect to announce the results of this consultation early in 2011. As an independent regulator it is not appropriate for me to discuss these issues with Ofcom, their decision will take into account views raised by stakeholders and will be made in accordance with their statutory duties.”

Although Vaizey did not stamp his opinion on this topic, it is positive to have the issue of MTRs raised during a period of limited activity whilst Ofcom deliberate their final decision.

A final decision is expected in early 2011.

For the vast majority of people, The One Plan will offer all the calls, texts and data they need at a price that challenges the market.

For £25 a month Three can now offer 2,000 any network minutes, 5,000 Three-to-Three minutes, 5,000 texts and 1GB of data.

You can find further details of the plan at: www.three.co.uk/theone