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Competition Commission decision could delay UK 3G rollout

January 21, 2003

Mobile phone operators in Britain are expected to make a formal appeal against the Competition Commission's decision to cut costs for calls made from landlines to mobile phones. The Competition Commission's proposal to lower "termination charge" could slow operators' rollout of 3G services, claimed the four UK 3G license holders.

The commission found the termination charge, the price of calling a mobile phone from a fixed line, levied by the mobile operators is 30% to 40% too high. Under the new proposal, operators will need to cut charges by 15% in real terms before July this year.

It was the failure of the operators to agree on a less severe price cap offered by Oftel that forced the case to be referred to the Competition Commission.

Mobile operators argued that the mobile phone market in the UK was already competitive and would damage 3G investments if the price proposal came into effect. The cost of calling mobile to mobile could go up to offset the fall in revenues operators get from fixed line networks.

Experts believe the decision by the commission could force handset prices to go up because operators may reduce handset subsidies. Another concern was that 3G investments could be reduced and further delay the launch of 3G services in the UK.

 


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This book discusses 3G services from the view of what is needed for the service to provide value to the user, what is the value proposition for the user, how will money be made out of delivering the service, and discussions on how revenue sharing propositions might work to benefit content providers and network operators. 3G operators should take note of this highly recommended book.

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