In the United Kingdom the real cost of many Telephone Calls whether from a Landline, or a Mobile has fallen over recent times, but there is one 'black spot', called the Mobile Termination Rate which is currently around 4.7p per minute that provides a 'cash cow' for Mobile Network Operators whilst resulting in a nasty surprise for consumers.
The Mobile Termination Rate, normally abbreviated to MTR is applied when a call is made from a Landline to a Mobile, or from a Mobile on one Network to a Mobile on another Network. Now it is fair that some charge is made for this, but 4.7p per minute is to say the least excessive. Therefore the TerminateTheRate Group has been formed to bring pressure to bear on the industry Regulator Ofcom to enforce a lower MTR that reflects the Network Operators actual costs. In part this pressure is to be applied by a Petition to Members of Parliament as well as Ofcom: Petition Form is on the TerminateTheRate Home Page
Outside the UK, the European Commission (EC), flush with success in reducing Mobile Roaming charges, recommended in 2008 that the MTR across EU Countries should fall on average by around 70% in three years (bringing it very close to the Termination Rates applied by Landline Network Operators)..
Would there be any downside to forcing operators in the UK to reduce the MTR they apply dramatically?
Potentially one type of Consumer could indeed be adversely affected this being Prepaid Mobile Users
A Deloitte Report from January 2009, points out that much of the revenue from Prepaid Customers is generated by the MTR, By reducing the MTR, these Customers could move from being a profitable Market to be a loss maker. How much of this is designed to generate FUD (Fear Uncertainty and Doubt) is difficult to gauge, but this market is too important to some major Network Operators to lose, so they will be already working on new methods of both retaining the Prepaid Customers, whilst ensuring that it remains a profitable market.
Returning to the TerminateTheRate Campaign, this has a surprisingly wide range of 'corporate supporters' including:
One Landline Operator (BT), One Mobile Operator (3), Industry groups, Local Authorities, Charities and Trade Unions - A full list of current supporters is here: Campaign Supporters Page 1 and Campaign Supporters Page 2
Having done some research into both sides of the MTR argument, the following are my conclusions:
The Mobile Termination Rate, normally abbreviated to MTR is applied when a call is made from a Landline to a Mobile, or from a Mobile on one Network to a Mobile on another Network. Now it is fair that some charge is made for this, but 4.7p per minute is to say the least excessive. Therefore the TerminateTheRate Group has been formed to bring pressure to bear on the industry Regulator Ofcom to enforce a lower MTR that reflects the Network Operators actual costs. In part this pressure is to be applied by a Petition to Members of Parliament as well as Ofcom: Petition Form is on the TerminateTheRate Home Page
Outside the UK, the European Commission (EC), flush with success in reducing Mobile Roaming charges, recommended in 2008 that the MTR across EU Countries should fall on average by around 70% in three years (bringing it very close to the Termination Rates applied by Landline Network Operators)..
Would there be any downside to forcing operators in the UK to reduce the MTR they apply dramatically?
Potentially one type of Consumer could indeed be adversely affected this being Prepaid Mobile Users
A Deloitte Report from January 2009, points out that much of the revenue from Prepaid Customers is generated by the MTR, By reducing the MTR, these Customers could move from being a profitable Market to be a loss maker. How much of this is designed to generate FUD (Fear Uncertainty and Doubt) is difficult to gauge, but this market is too important to some major Network Operators to lose, so they will be already working on new methods of both retaining the Prepaid Customers, whilst ensuring that it remains a profitable market.
Returning to the TerminateTheRate Campaign, this has a surprisingly wide range of 'corporate supporters' including:
One Landline Operator (BT), One Mobile Operator (3), Industry groups, Local Authorities, Charities and Trade Unions - A full list of current supporters is here: Campaign Supporters Page 1 and Campaign Supporters Page 2
Having done some research into both sides of the MTR argument, the following are my conclusions:
- Mobile Operators are resigned to the MTR being reduced.
- Most Mobile Operators want this decline in MTR to be in small steps over a long period.
- Business Users in Uk and across Europe find the current MTR rates onerous in the extreme
- Consumers in the UK and across Europe don't know about MTR as it is a 'hidden charge' within their call costs, they just see their Operators Rates for Calls, which where applicable include the MTR.
- Reducing the MTR dramatically will definitely benefit most Consumers, but has the potential to increase costs to Prepaid Services Users
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