The UK telecoms watchdog is locked in a fierce battle with mobile phone firm over call charges. The case has now been referred to the Competition Commission. The original proposals promised consumers �800m of savings.

BBC News Online investigates whether these savings will really be made, and finds out when British mobile phone users can expect a lighter bill.

What is the argument all about?

The telecoms regulator, Oftel, proposed in September that the price of calls to mobile phones should fall by around four pence per minute over four years.

But the four UK operators - One2One, Orange, Vodafone and MMO2, the former BT Cellnet - objected to the changes.

The regulator - which exists to ensure fair play in the market - says that mobile phone tariffs on charges to rival networks, as well as calls from homes to mobiles, are "substantially in excess of cost".

But the operators argue that the market is already highly competitive and that inter-firm rivalry rather than regulation should bring prices down.

And One2One has described Oftel's research as "flawed, inconsistent and incomplete".

What happens now?

Oftel has now referred the dispute to higher authorities in order to settle the matter.

The Competition Commission is an independent public body established in 1998 to rule on pricing matters as well as mergers and acquisitions.

It has the power to either uphold the regulator's price proposals or to take the side of the operators.

So the whole savings package could be called off?

Yes.

The Commission must weigh up both sides of the argument and decide if Oftel's planned price caps are in the public interest.

Analysts say that Oftel must have been very sure of its arguments in order to push ahead with a referral.

And investors read the news as bad for the mobile operators, whose share prices began to fall accordingly.

But other observers say that the mobile phone firms have a strong case since they are being lumbered with the exceptionally high costs of upgrading mobile phone networks to prepare for the launch of faster, improved services.

When will there be a decision?

The National Consumer Council has described Oftel's referral decision as "a good early Christmas present for millions of mobile phone users".

But that Christmas present is unlikely to arrive until next year.

The Commission's bureaucratic machine must chew through the minute detail of the evidence both for and against the proposals.

It has six months to decide whether regulatory action is in the public interest, and has the option to extend the inquiry for an additional six months if it proves particularly tricky.

So a final decision may not arrive until next December.

And until then the existing mobile phone charges still stand.