Cutting mobile phone charges

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THE price of some mobile phone calls could be cut dramatically with plans to regulate charges for the first time.

Telecommunications regulator the Communication Commission had published proposals for consultation aimed at bringing down the price paid by consumers for mobile phone calls.

It wants to bring the island in line with every other European country by obliging operators to comply with its directions on the setting of so-called Mobile Termination Rates, the charges made by one network for receiving calls from another.

Those charges are passed on to the caller and they can be significant part of the cost of calling mobiles. In EU countries, where they are regulated, their average cost is 4p per minute at peak times and 3.7p per minute off peak.

In the Isle of Man, however, they cost 7.44p per minute during the day and 5.76p per minute off peak. And they were higher still before the intervention of the Communication Commission in 2009.

The move follows a review by the commission of the local mobile market in which there are two operators – Manx Telecom and Cable & Wireless Isle of Man trading as ‘Sure’.

Dr Carmel McLaughlin, director of the Communications Commission, said competition with arrival of Sure in 2007 had ‘undoubtedly’ brought choice to the telecoms market but the aim of the new proposals was for competition to bring cost savings. ‘We hope to see real benefits for the customers,’ she said.

Competition

A second proposal aimed at encouraging competition would see Manx Telecom and Cable & Wireless obliged to provide appropriate cost accounting information as a condition of their licence.

Chairman of the Communications Commission Juan Watterson MHK said: ‘The commission has adopted European wide best practice in reviewing the telecommunications markets, while making it appropriate for the Isle of Man. Across Europe, mobile termination rates have come down due to this form of regulation. Our proposals would result in lower rates which should benefit consumers through lower call charges.’

Consultation on the proposals ends on June 29. A direction notice could be agreed by the end of the summer but it will be next year before customers start to see costs coming down.

Gillian Lauder, director of IBEX consultants, who was brought in to help carry out the review, said: ‘Mobile termination rates are regulated in every other European country. Termination rates in the Isle of Man are relatively high. We expect to rates come down and come down quickly.’

Mr Watterson said he hoped that operators would co-operate with the Commission to modernise the regulatory framework.

Under existing legislation, the only sanction for an operator breaching the conditions of its licence is for the licence to be revoked. Additional financial sanctions are proposed in a draft Communications Bill which will go out to consultation later this year. The Commission has previously published a review of the fixed communications markets.

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