Why has the Competition Commission acted?
Oftel, the telecoms watchdog, launched an investigation into termination charges back in 2001. The watchdog concluded the mobile phone companies were charging at least 40% more in termination fees than they were incurring in costs. Oftel said there should be an immediate price cut and that mobile firms would have their termination charges gradually phased out. As a result of the Oftel findings, the Competition Commission launched its own investigation last year. In January, the commission announced that it agreed with Oftel and adopted its formula for the slashing of charges. Vodafone, Orange and T-Mobile challenged the Competition Commission ruling on the grounds that the regulator was attempting to act outside his powers under both EU and domestic legislation. So the July price cut is only the beginning? In theory, if everything goes to plan, termination charges will be capped at the inflation rate minus 15% for mmO2 and Vodafone, and inflation minus 14% for Orange and T-Mobile each
