War of words breaks out over MTR decision

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Everything Everywhere, O2 and Vodafone slam Ofcom decision while BT and Three remain are adamant the right thing has been done

Everything Everywhere, O2 and Vodafone have condemned today’s decision by Ofcom’s to cut Mobile Termination Rates (MTRs) saying there is no evidence that customers will benefit from the decision.

O2 said it was “deeply disappointed” with the decision and called it “discriminatory”.

All three operators said they were now considering their options but would not say if these included a legal challenge.

Vodafone chief executive Guy Laurence said: “We are really disappointed that Ofcom has ignored the evidence that termination rate cuts will mean higher costs for pre-pay customers especially at a time when money is tight for many families.”

An Everything Everywhere spokesperson said: “By applying pure LRIC methodology in setting call termination rates going forward, Ofcom has suggested we recover a larger share of our costs from retail charges.

“This may force us to change the pay-as-you-go model as we know it as a large number of these customers will now become uneconomical – making the way our consumers currently buy, use and enjoy their mobiles radically different going forward.”

O2 took the same line as the other two operators in expressing its disappointment regarding the decision but went a step further in attacking companies in favour of the rate reduction.

‘Favouritism’

O2 singled out BT and said the fixed line provider was subject to favouritism from Ofcom.

An O2 spokesperson said: “Ofcom continues to regulate other companies, including BT, on other, more generous cost standards and this is discriminatory.

“Prepay mobile customers are likely to be worse off as they are charged to make up the shortfall and there is scant evidence that BT and other fixed companies will pass the lower costs to their customers.”

Ofcom support

BT dismissed O2′s statement, praising Ofcom’s decision and pledged to pass on call reductions to customers “as soon as possible.”

BT Retail managing director of consumer John Petter said: “Our focus is now on developing an all-inclusive package that will enable people to call mobiles from their landlines at no extra cost, with no fear of ’bill shock’.

“This will be incredibly good news for BT’s customers.”

Three, who partnered with BT in the ‘Terminate the Rate’ campaign –  said the other operators claims were unfounded given the fact consumers had already benefited from a drop in MTRs.

A Three spokesperson said: “Mobile Termination rates have been coming down for years. Every time they have come down it has resulted in lower prices and better deals for consumers.”

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