EC tells Ofcom to rethink mobile move

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The European Commission has criticised Ofcom's proposed price caps on mobile termination rates - which operating companies charge one another - for being "higher than necessary" and urged the UK telecoms regulator to rethink its approach.

The criticism threatens to reignite the war of words between the European Commissioner Viviane Reding and mobile operators. The two sides have repeatedly clashed over the issue of roaming charges during the past year.

Termination rates are the wholesale charges that mobile operators levy when connecting a call from a rival mobile or fixed-line network. Current price caps on them expire at the end of March next year and Ofcom has proposed cuts that would take the charges to between 5.3p and 6p a minute.

The EC has expressed concern that Ofcom has factored in excessive costs related to preparing for third-generation, or 3G, services. The five UK network operators splashed out £22.5bn to acquire 3G licences at the turn of the century but their value has reduced dramatically due to delays in deploying the technology and sluggish consumer demand.

Ofcom said it would consider the EC's arguments before publishing its final views next March.

Separately, an Ofcom survey showed that almost a third of UK consumers who have subscribed to broadband internet are watching less television, though 14 per cent are listening to more radio.