Ofcom has proposed that the cost of calls from landlines to all mobile phones is reduced to 0.5p a minute by 2015.

UK communications regulator Ofcom has today published proposals that will bring down the cost of calling a mobile phone from a landline from 4.3p to 0.5p a minute.

The consultation proposes slashing mobile termination rates, which are the wholesale charges that operators make to connect calls to each others’ networks.

Under Ofcom’s plans, these wholesale rates would fall from around 4.3p per minute today, to 0.5p per minute by 2015 – leading to cheaper calls to mobiles for the 32.7 million UK homes and businesses with a landline and saving consumers a total of £800m over the four-year period the charges have been set for.

According to Ofcom figures, the volume of data traffic over mobile networks has increased by 200% over the last year.
Ofcom’s latest proposals follows instructions from the European Commission last year that charges should reflect only the cost of establishing connection.

By forcing mobile firms to slash the termination fees they charge another operator for connecting a call, Ofcom hopes that customers will benefit from smaller bills and increased competition.

“The proposals will mean that both landline and mobile operators have more flexibility in designing competitive call packages, promoting competition for the benefit of consumers”, it said.

At present, Vodafone, O2, Orange and T-Mobile charge 4.3p a minute for connecting a call from someone who is not on their network. The newest entrant to the market, 3, charges 4.6p. Under Ofcom’s plans, this rate will fall to 2.5p across the industry in 2011-12, 1.5p in 2012-13, 0.9p in 2013-14 and 0.5p in 2014-15.

Mobile phone users will probably not see any benefit, though. Because the mobile operators levy this wholesale charge on each other, the saving in lower connection costs is largely cancelled out by the lack of income from those same charges.

In a separate announcement, Ofcom said mobile operators should cut the time it takes a consumer to transfer their existing mobile phone number to a new provider, to just one working day. Currently this takes two days. Operators will also have just two hours to release the Porting Authorisation Code (Pac) that consumers need to switch provider and keep their old number.

“Our research shows that over 70% of consumers want to keep their mobile number when they switch providers,” said Ofcom Chief Executive Ed Richards.

“Reducing the time it takes to transfer a mobile number to one working day, and enabling consumers to obtain a Pac quickly, means consumers will be able to switch provider more easily without the costs or inconvenience of changing their number.”

Customers can compare deals and find advice on switching at the Ofcom-accredited website www.billmonitor.com. BillMonitor continuously tracks the market, keeping up to date on the thousands of tariffs from UK mobile operators. This information is matched with each customer’s usage so that the site can recommend the best deal available to them.