|
||||||||
  |
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||
Storm over mobile phone price cuts
LONDON, England (CNN) -- Mobile phone operators have vowed to challenge moves by the UK's telecoms regulator Oftel to force drastic cuts to call charges. The watchdog imposed a tough one-off 15 percent cut in the price of calls from fixed-line phones to mobile phones on Wednesday, saying it will bring overall savings of £190 million a year to consumers until 2006. "Consumers are being overcharged for calls to mobile phones and the mobile phone operators must reduce their charges to a fair level," Oftel said in a statement. But mobile phone companies hit back immediately, saying the decision was "flawed" and warned consumers would end up paying more. Gavin Darby, chief executive of Vodafone UK, Europe's biggest mobile phone company, said in a statement: "This is a harsher regulation on top of increased competition. "We believe the report is fundamentally flawed and, as a result, will be seeking a judicial review to protect the interest of customers." Orange said it is considering a similar move, while mmo2 said it would delay the launch of its high-speed wireless services until the second half of 2004. In addition to the 15 percent one-off price cut, Oftel imposed further inflation-linked annual price reductions of up to 15 percent. In some cases charges could be halved, it added. Henk Potts, strategist at Barclays Private Clients, told CNN the move was a blow to mobile phone operators. "For the mobile phone companies this is adding insult to injury," he said. "The mobile phone companies spent billions of pounds on 3G (third generation, high-speed) services and now Oftel is saying cut prices by 15 percent. "Costs have actually been cut by 70 percent and this will mean 3G expansion plans could be delayed. It may seem good for consumers but it may not be as consumers may have to pick up the cost for reductions by paying more for mobile phones." But mobile phone stocks, mmo2 (OOM), Vodafone (VOD), Deutsche Telekom (FDTE) and Orange (PORA), rose after the decision. Expectation of Oftel's plans sent shares spinning last week, as the cuts in the cost of "termination charges'' -- the fees cell phone companies charge rivals to connect calls over their networks -- will dent British mobile phone revenues. "Vodafone is an international company so this means little, but they are seeking a judicial review," said Potts. Oftel's move prompted mmo2 to review its spending plans in the UK and said it would accelerate cost cuts to meet earning targets.
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
