Mobile phone firms to cut charges - for one day only

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Tough new rules designed to force mobile phone companies to slash call charges could be rendered useless, after the discovery of a loophole allowing operators to reduce prices for just one day.

Britain's four main mobile phone companies are expected to cut charges by 15 per cent on 24 July but put them up again the next day. This will make a mockery of a year-long Competition Commission investigation which found that consumers were paying too much when calling a mobile phone from a fixed line.

The revelation has angered fixed-line telecoms companies, which argued that Vodafone, Orange, mmO2 and T-Mobile charge them too much for receiving phone calls. The fixed operators pass on this cost to consumers though higher phone bills. A spokesman for BT said: "A reduction in the cost of calls to mobiles is something BT has consistently argued for." The average BT customer spends £13 a quarter calling mobiles.

Gavin Patterson, managing director of Telewest Broadband, said: "How on earth are consumers supposed to know what to believe when the whole fixed to mobile situation is such a muddle?"

The problem has been created by new European laws that will come into effect on 25 July. This will strip telecoms regulators of certain powers – in the case of Britain's Oftel, its ability to enforce price cuts.

Brussels is also planning to introduce rules to force operators to cut termination charges. But Britain's mobile operators plan to lobby for these rules to be dropped.

A spokesman for T-Mobile said: "It's ironic we are having to look to Europe for the true nature of competition when Britain has the most competitive mobile market in Europe."

Headed by David Edmonds, Oftel is thought to be livid about the plans to cut call charges for just a day and may propose an amendment to the Communications Bill. A spokes- woman said: "We would expect operators to conform with the spirit of the Competition Com- mission recommendations."