3 pushes to end UK termination rates

The Court of Appeal is to consider 3's claim that it should not have been forced to reduce the charges to the other mobile operators for connecting calls to its network.

In March 2007, Ofcom enforced a cut of 45%, from 10.7p a minute to 5.9p per minute by 2010 to 2011. This was the first time the regulator had included 3 in its price controls regime, unlike its larger competitors: O2, Vodafone, Orange and T-Mobile.

In May, the competition appeal tribunal rejected 3's case for Ofcom's decision to be overturned, but gave it leave to go to the Court of Appeal. The case is likely to be heard early in 2009.

3 claims the big four pay each other roughly the same amount in termination charges, whereas it is forced to pay much more as it has fewer customers, which is undermining the viability of its business.

Kevin Russell, 3's chief executive, told the Financial Times that his business had paid out £190 million (€238.81 million) to the to the others in termination rates since it was established in 2003.

If 3's appeal is successful, the company would be free to raise the charges for connecting calls to its network.

However, the Financial Times says that 3 wants the charges to be cut to zero or near zero by all mobile operators, so that they would be competing solely on retail pricing.

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