Termination charges fuel new BT row with T-Mobile

Damian Reece,City Editor
Tuesday 09 July 2013 01:56

A furious row erupted last night between BT Group and T-Mobile over termination rates, the amounts mobile operators charge when calls are switched from fixed-line networks to wireless networks.

Ofcom, the telecoms regulator, announced in June that termination charges had to fall. It said T-Mobile and Orange had to reduce average termination rates from 9.5p per minute to 6.31p per minute. Mobile operators have now supplied details of their new rates to Ofcom and copies of the data have been obtained by The Independent. The operators have complied with Ofcom's request for a reduction in average termination charges by reducing daytime and evening rates. However, they have increased the charges at weekends. In the case of T-Mobile the charges have risen by 86 per cent on Saturdays and Sundays, while Orange has increased them by 28 per cent. Vodafone and 02 have left weekend termination rates the same and cut daytime and evening rates.

BT reacted angrily when presented with the information, accusing T-Mobile of raising prices and confusing customers. Gavin Patterson, BT's group managing director for consumer and ventures, said: "The mobile operators have not done anything wrong, they have complied with the average savings that were required. But while obeying the letter of the law they are not really following the spirit of the law by hiking prices at the weekend when lots of people use their mobiles.

"This is disappointing, it is giving with one hand and taking away with the other. Some users may have read about these reductions in fixed to mobile prices and will be confused to see that in fact weekend rates if you are T-Mobile are going to increase substantially."

T-Mobile hit back at BT, accusing the fixed-line operator of actually increasing what it described as the "mark up" that BT will earn for connecting calls to mobile customers during daytimes and evenings.

A spokesman for the company also pointed out that while Ofcom had demanded that average termination rates had to fall by 1 September, BT was not planning to change its charging structure to reflect the reductions to October 1.

The German-owned operator said that the termination rates it charged for evening calls, for instance, would fall from 9.25p per minute to 4p per minute. However, the charge that BT makes to its customers for making a call to a T-Mobile customer during the evenings will only fall from 16.11p per minute to 14.4p per minute, leaving a margin or "mark up" of 10.4p per minute - equal to 260 per cent of T-Mobile's termination charge.

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