The Terminal Velocity of Change

On 1 April 2010, UK regulator Ofcom announced significant cuts to future mobile termination rates (MTRs). The result is that MTRs will fall by a whopping 88% on average, from their current average of 4.3 pence per minute (ppm) to just 0.5ppm by 2015.

This is interesting because of the scale of the change. BT must be whooping it up, though they should realise that F-M substitution gets a boost as price levels get closer still. I expect to see a relative closing of on-net off-net prices; more complete bundles; increased dominance of Any Time Any Network price models. MNO margins will suffer but I also think this will dampen future demand for voice over mobile broadband applications which were surely coming as mobile data starts to deliver.

One can challenge by asking whether mobile operators one day gang together and try to ‘punish’ fixed-line users, by increasing the rates of calls made to fixed lines?

Even though this sounds like a joke, until a couple of years ago C&W used to punish pre-paid customers, by charging call terminating fees to pre-paid customers at higher rate than post-paid. While it was impossible to tell the call originator who is who. So, my reply to the joke would be: “never say never”.

IMHO RA is so hopelessly reactive, they find out about things after they happen and then react.

It would be a real shift for RA to work with Regulatory people to anticipate changes in inter-carrier charging in order to come up with effective models to maximize returns.

David Leshem
David Leshem
David is an expert in enterprise solutions: billing, profitability, business intelligence, customer retention, churn and revenue assurance.

Away from the office, David is a keen photographer. Visit to sample his photographic work.