The market is still far from competitive, despite what the operators say

Anna Bradley, National Consumer Council

Giving evidence to the Competition Commission, the National Consumer Council said it should also back proposals put forward by the industry regulator Oftel to reduce fees.

Oftel referred the four UK mobile operators to the Competition Commission last month after the companies objected to Oftel proposals on charge capping.

Oftel proposal

The row centres on termination rates - the fees that mobile phone operators charge to other telecoms companies for connecting calls to their networks.

Oftel claimed these charges were excessive. It said in December that a peak-rate national call over BT landlines which cost 24p would incur a charge of 60p on a mobile - of of which the termination fee accounted for 39p.

The watchdog proposed capping growth in termination fees to 12 percentage points below inflation, which would imply a price cut of about 10%.

The cap would last for four years and it has been estimated it could save consumers about �800m in total.

When the four mobile operators - Vodafone, MMO2, Orange and One2One - objected to the move Oftel referred the matter to the Competition Commission.

Excessive fees?

The mobile operators say there is sufficient competition in the mobile market to keep charges under control.

But the NCC disagrees.

"The market is still far from competitive, despite what the operators say" said NCC director Anna Bradley.

"There is little consumers can do to avoid these charges, whether they are calling from a fixed line or a different mobile network."

"These charges account for about two-thirds of the final call charges, but are well above the operators' actual costs."