Ofcom proposes cutting the UK’s largest mobile carrier’s termination rates to £0.005 (€0.005) by 2015, from £0.043 at present, a move that Ovum analysts say is a major threat to carrier’s future revenues.
A UK court has barred BT from reclaiming termination fees dating back to 2007 from the country’s four largest mobile operators.
The country’s Court of Appeal overturned a previous court ruling that forced regulator Ofcom to back-date lower termination rates against Vodafone, O2, Orange, and T-Mobile, meaning BT will miss out on a windfall estimated to be worth millions of pounds, Bloomberg reports.
A panel of three judges were sceptical that BT would pass the windfall onto its subscribers, Bloomberg said.
BT said it is considering its next move following the decision.
"We are disappointed with the judgment from the Court of Appeal on mobile call termination, and we are currently considering our options,” a spokeswoman told Telecoms Europe.
Ofcom welcomed the decision, after arguing that courts couldn’t force it to back-date rate cuts
That view was echoed by a Vodafone spokeswoman, who told Telecoms Europe the firm was happy that the court of appeal “has clarified that termination rates can’t be regulated retrospectively.”
Mobile termination rates account for 12-15% of European mobile carrier’s total service revenues at present, according to Fitch Ratings.