David Prosser: Ofcom must hang up on phone con

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The Independent Online

What exactly is the point of a consumer watchdog if it fails to protect consumers? Telecoms regulator Ofcom has let down millions of telephone users with its lily-livered refusal to take on the country's big mobile phone companies.

What exactly is the point of a consumer watchdog if it fails to protect consumers? Telecoms regulator Ofcom has let down millions of telephone users with its lily-livered refusal to take on the country's big mobile phone companies.

While no one likes paying telephone bills, they are a necessary fact of life. But most people would be astonished to discover that every time they call a mobile phone, they have to pay not only their own call charges but also a fee to the network on which the mobile is registered.

The mobile phone networks make so much money from these "termination charges" that last year Ofcom ruled there should be strict caps on the size of the fees. Since last summer, the mobile companies have therefore been allowed to charge no more than 8p to 9p a minute when people make calls to their networks.

At the time, Ofcom also said it would review the price caps next March. Since then, consumer groups such as the Telecommunications Users Association (TCA) have been lobbying for a reduction to 3p a minute.

So Ofcom's early announcement this week that the networks will continue to be able to charge more than 6p a minute is a huge disappointment - especially as the regulator also hinted it could drop price controls altogether in 2007, if it thinks the industry is sufficiently competitive.

Don't be distracted by the fact that this sounds like a matter of a few pennies. The TCA says the average phone user pays £10 a month in termination fees - remember, this isn't a charge to use your own phone, but a bonus payable to the network which you happen to be calling.

Vodafone, the biggest network, and others justify the charges on the grounds that they are fees payable for your calls to be connected. But if that's what the money is for, why do people have to pay every minute they're on the line, rather than simply when their call is first put through?

It's also ridiculous that one company, Hutchison 3G, is not covered by the price controls at all - in other words, it can charge what termination fees it likes. Ofcom says that the company should be excluded from the regulations because 3G is a new technology that needs help to get off the ground.

Termination charges are unfair, full stop. Generally speaking, both land line and mobile phone users can shop around in order to find the cheapest bill. However, you have no control at all over the termination fee part of the bill, so there is nothing you can do in order to protect yourself from high charges.

That's where a decent consumer watchdog should step in - regulators were invented in the first place in order to sort out this type of problem. Sadly, this time, Ofcom hasn't done its job.

***

Teenagers staying on at school should not miss out on free cash. The application period for education maintenance allowances, worth up to £30 a week, began on Monday - this is a grant available to 300,000 teenagers in England aged between 16 and 18.

The cash is for teenagers who come from families that have an annual income of less than £30,000. Study such as A-levels, vocational education and even short courses qualifies - students just have to sign a contract, promising to turn up.

The government's aim is to reduce the number of teenagers who drop out of education at the age of 16. If you think you qualify, your college will be able to provide an application form.

d.prosser@independent.co.uk

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