Competition Appeals Tribunal demands steeper cuts for landline to mobile call costs

The Competition Appeals Tribunal has called for cuts in costs for connecting landline calls to mobile phones to be phased in faster

The Competition Appeals Tribunal has called for cuts in costs for connecting landline calls to mobile phones to be phased in faster than set out under a plan introduced in April 2011.

The news comes as a shock to mobile operators who complained about the original plan, set out by telecoms watchdog Ofcom, to cut costs gradually by 84% by April 2015.

The Competition Appeals Tribunal now wants more aggressive cuts in the first three years, tapering off to reach a total of 85% by April 2015.

Ofcom has welcomed the tribunal's ruling, saying its decision would "reduce significantly termination rates, which will bring competition and consumer benefits".

The new rate of 0.65p a minute will reduce the UK’s calling costs by an estimated £800m, according to The Guardian, but the savings may not all be passed on to customers.

Vodafone alleges that cuts introduced since April 2011 are not being passed on to consumers by fixed line companies like BT Group and Virgin Media.

"The fixed-line operators have merely pocketed previous reductions in mobile termination rates, instead of reducing prices for customers,” Vodafone said in a statement.

BT put its call charges up twice in 2011, TalkTalk increased line rental by 9.5% in September and Virgin Media is increasing call charges in April.

Vodafone also argues the tribunal’s ruling will harm consumers at the lower end of the market as the fees had been used to subsidise pay-as-you-go handsets.

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