14/02/2007

Disputes between T-Mobile and BT and BT and each of Hutchison 3G Ltd, Orange Personal Communications Services Ltd and Vodafone Ltd relating to call termination rates | Ofcom

Disputes between T-Mobile and BT and BT and each of Hutchison 3G Ltd, Orange Personal Communications Services Ltd and Vodafone Ltd relating to call termination rates | Ofcom

BT, being the UK encumbant, handles a large ammount of UK termination - especially for foreign operators. They offer what's known as blended rates, which mean they will offer fixed charges for geographic, non geographic and mobile ranges even if invidual charges differ (i.e. there are differences say between mobile carrier termination charges).

Now operators want to charge BT higher rates as they say they have higher charges incurred to deliver 3G calls compared to 2G (GSM) calls and BT are disputing this with Ofcom.

The MNOs (mobile network operators) are very wary of termination as they see this as a cash cow, currently it's considerably cheaper to get retail bundles of mobile minutes than wholesale, so fixed to network charges sustain a lot of their margin.

They have been very wary of the new low power GSM "Guard Band" licensees - even though Ofcom consider them fully fledged GSM networks. Some even refusing to switch their number blocks (even though they are allocated by Ofcom), though that situation seems to be changing. Mobile operators who want to offer say WiFi mobile services are not having such luck.

Another issue is number portability, currently the number porting system is run by the MNOs and only available to the MNOs. Anyone wishing to participate in MNP (mobile number porting) has to get permission from all existing MNOs and anyone has the power of veto. So far they are not accepting number porting from anyone else. Ofcom seem to be taking a positive view on this (in that the MNOs will have to allow other operators), but it could take a while.

The MNOs want to keep control of their customers and networks and new entrants could pose a huge issue for them and they're scared.

If new entrants can offer flexible, innovative services then the MNOs should be worried.
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