The UK regulator will keep price controls on call termination, in a market that continues to have some importance
A market still relevant, despite the OTTs: Ofcom yesterday finalised the review of the wholesale call markets, covering both fixed and mobile interconnection. Despite the rise of OTT communications, which make it possible to use apps for voice and video calls, the telephone call continues to be an essential service for many people. In 2019, UK customers made 200bn minutes of calls from a landline or mobile, and mobile voice traffic grew between 10% and 45% across operators at the start of the COVID-19 lockdown.
What changes for call termination? Ofcom’s review keeps fixed and mobile termination regulated for the period 2021–2026, and continues to impose price controls on these services. The fixed termination rate will stay at the current level (0.03p per minute in real terms) whereas the mobile termination rate will go down from the current 0.468p per minute to 0.379p per minute – a decrease by almost 20%. Ofcom changed its approach to setting charge controls for calls originating from abroad, moving away from applying the same price cap to all calls regardless of their origin. Operators will now be able to charge not more than the equivalent rates charged by their international counterparties where those are higher than the UK regulated cap. Ofcom expects this approach to offer the best chance for reciprocal low termination rates between the UK and the EU.
Call origination is now deregulated: Ofcom is finally removing all regulation from the fixed call origination market, because the need for alternative operators to purchase this service from BT is falling away and the majority of these operators are already using an alternative. Ofcom had already removed price regulation from this market in its previous review of 2017. However, BT has made voluntary commitments to provide call origination over WLR and ISDN2/30 products, until they are phased out in September 2023 and December 2025, respectively.
