Operators could take Ofcom to court over MTRs, says analyst

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Vodafone and O2 are unlikely to take Ofcom rule on mobile termination rates lightly and could attempt to block the move with legal challenges

Ofcom faces tough opposition from operators including possible court action in its bid to reduce mobile termination rates (MTRs), according to market analyst Ovum.

Speaking after the release of a new report, Ovum lead analyst and report author Matthew Howett said: “Operators will definitely not accept any reduction in termination rates without a fight.

“Ofcom should be prepared for a fierce battle with operators, keen to protect their own interests.

“There is a strong possibility operators will challenge any decision [made by Ofcom] in the courts.”

Howett said Vodafone and O2 were the two operators most likely to challenge the regulator given their customer bases.

Both told Mobile News any possible decision to take legal action against the regulator would have to wait until after Ofcom’s ruling in February.

A spokesperson from Vodafone said: “We are currently waiting to hear Ofcom’s decision on the termination rates consultation.

“Following that, we will be able to decide on a way forward which s best in the interests of our customers.”

An O2 spokesperson said claims to take Ofcom to court were “premature” but acknowledged Ofcom’s decisions are “capable of being appealed to the Competition Appeals Tribunal”.

Ofcom wants to slash MTRs from around 4.3p per minute to 0.5p per minute by 2014/15, with average cuts of around 42 per cent made each year until then.

The planned cuts are currently in the consultation process and decision is expected in February next year.

According to existing European Union (EU) telecoms rules, Ofcom must take “utmost account” of the European Commission’s (EC) recommendation that a plan to bring down MTRs must be in place by 31 December 2012.

Howett said this could be a “tall order”, but said if any court action was bought against Ofcom and failed the operators responsible would more than likely be made to ‘back pay’ for any delay to rolling out lower MTRs.