UK mobile contract costs to decrease?

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Ofcom has announced a reduction in mobile termination rates, or MTR for short, a move designed ‘to benefit UK consumers’.

From April 1, a cap will be placed on the rates all of the big networks can charge. Three UK, O2, Everything Everywhere and Vodafone will need to lower the cost to connect a voice call to each others’ mobile network.

The reasoning is down to what Ofcom believes should be a cost that reflects the true cost of the service, not an inflated one chosen by the networks.

What this means for the consumer is a lower cost for landline companies to pass calls to mobile. Ofcom expects the saving to pass on to the consumer, thanks to it being a competitive market and some companies have already promised to lower their charges.

For mobile to mobile, Ofcom also expects the lower charges to promote competition. “Operators will have more pricing flexibility and will be able to increase the range of packages available to consumers,” reads the press release.

Although this sounds great, and consumers are being more frugal with their pennies during the current financial climate, the popularity of high-end smartphones and tablets, like the iPad 2, which allegedly sold between 500,000 and one million units on its release weekend, indicates people are still willing to pay top-dollar for technology.

As long as John Smith is happy to pay his £40-a-month contract, we can’t see networks adjusting costs that much. A lower MRT doesn’t necessarily mean we will see much of a reduction, if any at all.

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