Telcos challenge Ofcom MTR cuts
UK regulator Ofcom faces a barrage of legal challenges to proposed mobile termination rate cuts that will slash telco’s revenues 80% over the next four years.
Four leading operators have challenged the changes in appeals lodged with the Competition Appeal Tribunal, claiming the regulator used the wrong measure to calculate rates for the period April 1 2011 to March 31 2015, and calling for the Tribunal to re-evaluate the sum.
Vodafone, BT and Everything Everywhere aim to overturn Ofcom’s decision to slash their termination rates from 4.18 pence per minute (€0.04) to 0.69 pence by 2015, while Three protested a cut from 4.48 pence currently.
The Tribunal handles appeals under the UK’s Competition Act and has the power to set aside part, or all, of the decisions made by regulatory bodies, or vary the amounts involved. Ofcom claims the new calculation is necessary to account for a switch in carrier’s main revenue source from voice to data.
Lawyers told the Financial Times the appeals have little chance of success.