The OECD wants mobile termination rates abolished

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ajw

1932 posts

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#98602 2-Mar-2012 14:35

The OECD is calling for mobile termination rates to be effectively abolished in order to make it easier to compare mobile costs across countries and boost competition.

http://www.cellular-news.com/story/53324.php?s=h

NonprayingMantis

6434 posts

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#589449 2-Mar-2012 15:24

sounds pretty risky to me.

despite all the hoo-haa about MTR, they don't actually impact average retail prices very much, if at all since one operators revenue is another operators cost.

HOWEVER, what they do effect is a transfer of revenue from having a customer who receives a call , to having a customer who makes the call. This means that people who spend money to make lots of calls will become MORE profitable to perators, but customers who don;t make many calls (and instead recieve them) will become less profitable.

Basically, termination revenue are what allows the poorest members of society to have phones. they don't spend muhc money, but theoperator can still give cheap handsets because they will collect some termination revenues from them.

I suspect if you remove MTRs you would quickly see an increase in the price of prepaid handsets, and also an increase in the prices for very low usage customers.

http://www.independent.co.uk/news/uk/home-news/mobile-operators-pull-prepay-phone-subsidies-2290895.html

"Pay-as-you-go mobile phone users are set to be hit in the wallet as the UK's largest operators pull their subsidies on handsets in response to a regulatory change that came into force last month.

Vodafone has become the latest operator to cut its discounts for sales of pre-pay phones, saying all subsidies would eventually be removed. This followed similar moves by O2 and Everything Everywhere, the Orange and T-Mobile owner.

This is in response to Ofcom's decision to cap termination rates, the cost charged by networks for customers on rival networks, and landlines, connecting to theirs. The regulator said in March, that these mobile termination rates must be reduced by 80 per cent in four years, potentially costing the industry ?2bn. The operators warned at the time that pre-pay customers could suffer as a result.

A spokesman for Vodafone told The Independent: "Faced with the damage caused by the recent decision on mobile termination rates, we've been reviewing our subsidies on pay as you go handsets," adding: "We have no choice but to remove them from pay as you go mobile phones from July onwards."

Behodar

10504 posts

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#589468 2-Mar-2012 15:59

As far as I'm aware the US doesn't have termination rates... and they have some of the highest prices in the OECD (including having to pay to receive calls).

NonprayingMantis

6434 posts

Uber Geek

#589471 2-Mar-2012 16:02

Behodar: As far as I'm aware the US doesn't have termination rates... and they have some of the highest prices in the OECD (including having to pay to receive calls).

indeed they do.

NonprayingMantis

6434 posts

Uber Geek

#589473 2-Mar-2012 16:04

ETA:
They have very high prices for a bucket of usage, but very low effective per minute rate. BUT that is because their ?minutes? also include inbound minutes, as well as ring time minutes in many cases (even where the call is not answered), things that most other countries do not bill for at all, and so do not count when working out the effective per minute rate

ajw

1932 posts

Uber Geek

#589477 2-Mar-2012 16:08

Bill and Keep and yes you do pay to receive calls. Some pricing to look at.

http://www.metropcs.com/metro/category/Plans+%26+Services/Plans/cat250023

http://www.mycricket.com/cell-phone-plans#mobile-plans

NonprayingMantis

6434 posts

Uber Geek

#589489 2-Mar-2012 16:26

Ouch. Nothing below $35USD/month ($42NZD, $48 if you allow for GST!).

Compare that to NZ where you have postpaid plans for as little as $20NZD/month, and prepaid where you can spend as little as you like and average revenues are in the order of $10-20NZD. Yes, you get fewer minutes/txts etc, but at least you have that option, and it is still plenty of minutes etc for most people

old3eyes

9119 posts

Uber Geek

Subscriber

#589538 2-Mar-2012 19:02

NonprayingMantis: sounds pretty risky to me.

despite all the hoo-haa about MTR, they don't actually impact average retail prices very much, if at all since one operators revenue is another operators cost.

HOWEVER, what they do effect is a transfer of revenue from having a customer who receives a call , to having a customer who makes the call. This means that people who spend money to make lots of calls will become MORE profitable to perators, but customers who don;t make many calls (and instead recieve them) will become less profitable.

Basically, termination revenue are what allows the poorest members of society to have phones. they don't spend muhc money, but theoperator can still give cheap handsets because they will collect some termination revenues from them.

I suspect if you remove MTRs you would quickly see an increase in the price of prepaid handsets, and also an increase in the prices for very low usage customers.

http://www.independent.co.uk/news/uk/home-news/mobile-operators-pull-prepay-phone-subsidies-2290895.html

"Pay-as-you-go mobile phone users are set to be hit in the wallet as the UK's largest operators pull their subsidies on handsets in response to a regulatory change that came into force last month.

Vodafone has become the latest operator to cut its discounts for sales of pre-pay phones, saying all subsidies would eventually be removed. This followed similar moves by O2 and Everything Everywhere, the Orange and T-Mobile owner.

This is in response to Ofcom's decision to cap termination rates, the cost charged by networks for customers on rival networks, and landlines, connecting to theirs. The regulator said in March, that these mobile termination rates must be reduced by 80 per cent in four years, potentially costing the industry ?2bn. The operators warned at the time that pre-pay customers could suffer as a result.

A spokesman for Vodafone told The Independent: "Faced with the damage caused by the recent decision on mobile termination rates, we've been reviewing our subsidies on pay as you go handsets," adding: "We have no choice but to remove them from pay as you go mobile phones from July onwards."

In the UK these prepay handsets are locked to the carrier. If they remove the subsidies then they would have to sell them unlocked as well..

Regards,

Old3eyes

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old3eyes

9119 posts

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#589539 2-Mar-2012 19:03

Behodar: As far as I'm aware the US doesn't have termination rates... and they have some of the highest prices in the OECD (including having to pay to receive calls).

You mean prices like 5c / minute??

Regards,

Old3eyes