The UK regulator, Ofcom, has proposed cuts in interconnection fees (also known as mobile termination rates), the wholesale charges that operators make to connect calls to each others’ networks. It has unveiled plans to cut the rate in stages from 4.3 pence ($0.065) per minute to 0.005 pence per minute by 2015.
Europe’s mobile phone industry will today mount a last-ditch effort to ward off strict price caps on text messages and data downloads within the EU by warning that heavy regulation is cutting capital spending and profit margins. With Viviane Reding, EU telecoms commissioner, poised to propose a new round of price caps this month, mobile operators claim their capital spending has already slipped from 13% of revenues in 2005 to 11% last year – and could fall further. The GSM Association – the global trade body representing more than 750 GSM mobile phone operators – citing data from a study by management consultants, says the industry’s return on capital employed was as low as 7% in 2007 or less than half that of other significant sectors such as steel and software. Sources said this gives the lie to Reding’s claim that it is making excessive profits from “roaming” services in the EU. Read the full stiry in the Guardian here.
Half of the UK’s broadband users are unhappy with the service from their internet providers even though high-speed connections are at their cheapest and fastest, according to a survey by price comparison service uSwitch. With 15 million customers – half the country – spending £3bn on broadband every year, the gap is widening between the companies perceived as best and worst providers, according to uSwitch, which makes money by encouraging consumers to hunt out new deals. Its survey of nearly 11,000 broadband customers suggests four million customers are not satisified with their provider and four out of nine companies have less satisfied customers this year than last. Read the full story in ‘The Guardian’ here.