Terminate the Rate: Ofcom’s MTR decision.

Regulator Ofcom has come to its decision on the future of Mobile Termination Rates (MTRs). They are coming down significantly, just not as far or as fast as we and many others had hoped.

MTRs are the fees that mobile operators are allowed to charge to anyone that connects a voice call to their network, bumping up the price of calling mobiles.

Last April Ofcom set out its proposals to reduce the amount mobile operators were able to charge from 4.3p per minute to 2.5p in April 2011 with the price coming down each April to 0.5p in 2014.

The idea behind these changes is that mobile operators should only be able to charge a fee reflecting the true cost of that service, not an inflated fee.

Ofcom has stuck to its guns on the principle, which is good news. But it has opted for slightly higher figures than it initially suggested and still won’t make the full benefits of these savings a reality until April 2014.

Ofcom has ruled that from April MTRs must come down from around 4.3p per minute to 2.98p, eventually coming down to around a penny in three years’ time.

What does this mean for consumers?

From our perspective, the result secures big bundle deals like The One Plan and the more generous pay as you go bundles we introduced in anticipation of lower MTRs. Landline users, for years wary of the cost of calling mobiles, will get a better deal and, eventually even all-you-can-eat bundles of minutes as MTRs continue to be reduced.

Since the Terminate the Rate campaign launched in May 2009, our goal has been to make the cost of calling a mobile fairer. Terminate the Rate has received an incredible amount of support from over 160,000 UK consumers, over 65 organisations that represent the interests of tens of millions of people in the UK, 262 MPs and over 1,600 small businesses. This support has enabled the campaign to make a clear case for change.

On behalf of the Terminate the Rate Campaign we’d like to thank all the supporters the signed the petition and backed the campaign. Our supporters, many of them Three customers, have taken this from a hidden industry issue to the top of Ofcom’s agenda.

To take a wider view, this decision supports the Government’s call for regulation that supports competition and growth. While we’d like Ofcom to go further and faster in cutting this rate, Ofcom’s move is pro-competition and will drive further reductions in the cost of calls to mobiles for UK consumers.

The next big issue for competition and consumer pricing that Ofcom must address is that of spectrum, the radiowaves that power everyone’s smartphones and dongles. More of this crucial spectrum is becoming available for mobile users.

Smartphones mean that mobiles are fast becoming the internet access method of choice. The Government and Ofcom are at a fork in the road as they decide how that spectrum will be allocated to mobile operators. The decisions about to be made will determine whether smartphone users can continue to expect great pricing and all-you-can-eat data offers or whether prices will rise.

We’ll update you on that issue soon but in the meantime this is what the media is saying: Daily Mail, Mobile magazine, Pocket Lint.

56 Responses to Terminate the Rate: Ofcom’s MTR decision.
  1. Moderator: Johanna

    @Pete – Thanks I’ll pass your congrats on to Kaz :-)

  2. Pete

    @Mod Johanna – I knew there was something..but nothing to do with me….Please send my very best wishes and congratulations to Kas and his partner…Regards

  3. Moderator: Johanna

    @Pete – Not at all, I probably shouldn’t announce this but hopefully Kaz won’t mind me saying – he’s gone to get married! I’ve checked and he’s asked the questions for you but we don’t have any more info to give.

  4. Pete

    @Mod Johanna – This doesn’t feel right…I’m getting mixed feelings and reactions from you guys…where’s Kaz has he left 3..? Is he unavailable for comment..?

  5. Moderator: Johanna

    @Pete – I’ve taken a look and I think Kaz has taken the responses as far as they can go! Sorry but we don’t have any more detail.

  6. Pete

    @Mod Johanna – yes…and the comment that Kaz on the 26th put that for some reason he was sending my comments over to another department and that he or someone would come back to me…?

  7. Moderator: Johanna

    @Pete – Are you referring to your questions about MTR and masts in your area?

  8. Pete

    @Mod Kaz – any news re the comments on the 25th and 26th April…

  9. Pete

    @Mod Kaz – re the 25th and 26th April comments…any news..?

  10. Moderator: Kaz

    @tom – We offer SMS delivery reports as an additional service, which isn’t included as part of the core package that you signed up to. We an make changes to these additional services (including changes to pricing) under it’s customer terms. Therefore you will not be able to end your agreements as a result of this change. I can arrange for someone in our customer services if you require more clarification, just let me know.

  11. tom

    Moderator: Kaz please consult your terms and conditions before misinforming your customers.

    As per your terms and conditions an additional service is and i quote..

    “Additional services: additional or supplemental services for which a charge is made in
    addition to the fixed periodic charges for your package or add-on(s)”

    Delivery reports are currently an inclusive service not and additional service, changing them
    to a paid for service gives people grouds to cancel without penalty if this change will have a
    detrimental affect on them.

    Also giving people 2 weeks notice of this chage is a breach of contract, please see your t&c
    one month notice period is required..

    4.1 (b) we will let you know at least one calandar month in advance if we decide to
    (i) discontinue your package or
    (ii) make any variations to your agreement which are likely to be of detriment to you
    (iii) increase the fixed periodic charge of your package by any amount that is more than the
    percetage increase in the retail price index figure iay 12 month period.

    Why do you feel the need to lie to customers when their rights are clearly there i black and white?

  12. Moderator: Kaz

    @Jim – Sorry you feel that way. I can ensure you this charge is purely to cover the cost of this service. It is an additional and optional service that can be switched off.

  13. Jim

    So what are you going to do about the new charge of Text delivery reports costing 1p per report from 06th June 2011?

    I signed up for the MTR thinking 3 were trying to promote fairer use of the networks, only to find they have changed the T&C’s of my contract; only to claim that Delivery reports are an Additional Service!

    So out of 4000 text messages that I get under my contract I use on average 232, so I’ll pay an extra £2.32 a month for Delivery reports even though I still have 3768 texts left which they could take this off, just like they do with my minutes when I call Voice Mail!

    Robbers and Thieves!

  14. Moderator: Kaz

    @Samuel – Sorry about that, which part of my answer would you like clarification on?

  15. Samuel

    @ Mods,

    Thank-you for telling me how to opt out of the messaging delivery but that wasn’t the question i asked.

  16. Moderator: Kaz

    @Samuel – This is an optional facility that customers can choose to use and this small charge is designed to contribute to the cost of operating this service. You can opt out if you like, please click here to find out how.

  17. samuel

    Can you explain why three have decided to charge for delivery reports. I would have thought that having had the termination cost reduced, albeit not as much as you would have hoped, customers would be charged less. What is the cost of delivery reports?

  18. Moderator: Kaz

    @Tony H – There are no plans to bring back ‘Three like home’ I’m afraid. We do work really hard to make sure we give good value to our customers and are always releasing new plans and offers.

  19. Steve

    I came back to three after defecting to 02 for an Iphone. Three lost me when their range of phones was getting old and overseas roaming was too expensive. I am pleased to say both problems have been corrected.

    I miss the “Three like home” scheme where you could use your minutes on Three networks in other countries. I didn’t use it very often but it was great when I was in Denmark visiting friends and I didn’t have to worry about the cost of calling.

    I joined the MTR campaign by writing to my MP. MTR seems a leftover from when mobiles were just starting to put up masts and and there was a huge investment by the companies. Now it’s just a call tax so I agree with Three – it should go.

    Steve

  20. Tony H

    So, three mods, any feedback on my post on April 13th?
    Or will Three customer services overlook this again.

    Not happy at all with Customer services.

  21. Moderator: Kaz

    @Pete – I’m going to pass your comments onto another department and will get back to you.

  22. Pete

    @Mod Kaz – Does three have any comments on any of the other points that I’ve posted yesterday…?
    or any comment on the post where I told three about the o2 and Vodaphone masts being refused in my area…?

  23. Moderator: Kaz

    @Pete – I’m afraid there still no more details following Ofcom’s MTR decision. Sorry I can’t help any further at the moment.

  24. Pete

    @Mods – The article is http://www.dailymail.co.uk/sciencetech/article-1375699/Brits-waste-195-annual-mobile-phone-bills.html

    If you want to have a look.

  25. Pete

    @Mods – I’m not sure on how and why of the pricing and time allocation of mobile tariffs, meaning the 30 days, but can I ask why if you pay a fee for your minutes, texts and data allowance why it has to last for 30 days, why can it not last until the minutes, texts and data has run out…? Would this not be farer to us users and overcome the last post I sbmitted.

  26. Pete

    @Mods – I don’t know if three are aware of this but one of the national newspapers, Sean Poulter consumer affairs editor has wrote an article in conjuction with findings from http://www.billmonitor.com which in general says that “the average mobile user has 300 per cent more free minutes than they need and overpays by about £200 a year”.

    This is kind of what I said to you earlier without the figures…

    So any news on what three going to offer my 3Pay tariff after I have supported the terminate the rate campaign.

  27. Moderator: Johanna

    @Chris – The price of The One Plan varies depending on which phone you have. You won’t see the cost of your contract decrease but you will have noticed added value like AYCE data.

  28. Chris

    how come when I took out a OnePlan it was 45 a month now 35 a month but I have not seen a reduction in what I am paying?

  29. Moderator: Kaz

    @Charles sayers – Sorry to hear that you not happy. We do change our postpositions from time to time to reflect customer needs, there are still plans that include three to three calls. Maybe you could consider moving plans when you are eligible.

  30. Charles sayers

    I joined 3because of free 3 to 3 calls and texts you have just stopped it with out any notice to me not happy

  31. Tony H

    I did contact three about this in the distant past, but no reply. If three want to get a greater share of the market and a shed load of kudos.
    The need to bring back “Three like home”, the reduced rate is all fine and dandy if you are in europe. I did ask in my email to custome services. How this was of use when “TLH” was stopped, Australia is not in europe.
    Come on Three, you own the sister networks in the “TLH” locals, so you will not have a routing or international charge to pay. Whey make Three customers pay over the top roaming charges in these countries, when you own the network?
    Just look at http://www.three.com/ this will show the ones you own.

  32. Moderator: Kaz

    @Simon – Thanks for the great comments – And welcome to Three!

  33. Simon

    I have just taken out a contract with the iPhone on The One Plan. I have been a loyal O2 customer for around 12 years (back when they were BT Cellnet!) I have noticed that their prices have increased an awful lot since the Telefonica takeover and bit by bit my monthly bill gets bigger and bigger. This time, instead of just upgrading as I normally do, I decided to shop around. I was actually quite shocked at what a good deal The One Plan was that I just couldn’t let it pass by. I have compared all the networks that have go the iPhone and 3 offer the cheapest deal with the most minutes! I was paying O2 £50 plus VAT for 500 MB Data (was unlimited, now capped to 500MB), 900 Mins, Unlimited texts and O2 to O2 calls. It’s a rip off when you compare it to the £35 that 3 are charging for 2,000 Mins, 5,000 texts, All you can eat data, and 5,000 3 to 3 mins. I think 3 are doing a better job at keeping the prices down than any other UK network at the moment. Keep it up!

  34. clive

    on pay as you go .

  35. clive

    how about 400 mins 1500 texts .all you can eat data . and bring back 3 to 3 calls thats why we came to 3 not happy

  36. mustafa ibisler

    i think this is all fuss because businesses are there to make profit if you look 3 not long ago 3 to 3 call charges a lot cheaper them today.

  37. stew

    Hi mod, just read your reply to steph about using the official skype app, I’ve tried it before on my android phone and it doesn’t recognize the 3 network

  38. Moderator: Johanna

    @steph – Thanks for your feedback. We’re 4 years away so ‘practically abolished’ may be a little optimistic. We’ve already started introducing benefits, like increasing PAYG mins from 250-300 and introducing AYCE data on The One Plan and now PAYG. Great that you enjoy using Skype, you can make video calls depending on which phone you are using, via the official Skype app. The Skype app does use a fair amount of data though, so best bet is to get on The One Plan or PAYG all-in-one and you can use the app freely.

  39. stew

    Totally agree with Steph, 3 can’t really offer anything else on the one plan (except multi media messages and a generous bundle of 08 number calls ). The removal of MTRs must surely save 3 as a company millions so I hope to see a reduction in your prices or more for what we currently pay.
    I second the request for skype video calls, fantastic idea!

  40. steph

    Hi mod, with MTR fees practically abolished can you now tell us how 3 will pass on the benefits to its customers.
    Your One Plan really can’t offer anymore than it already does (although a bundle of 08 number calling minutes would be a godsend ). My guess is that all you can do is drop your prices or lower your contract lengths.
    By the way I make use of skype every day but when are we going to see Skype video calls on 3? As someone who teaches being able to let the other person see what I’m doing would make my life far easier rather than having to describe things

  41. RAZ

    Three has put their price plans down, but why don’t they concentrate in providing any quality signals, may be this is the reason 3 as a network are cheap as they are not big enough to compete with other uk networks. The signals drop like a yo yo. My suggest to 3 is quit playing these games in trying to get more customers by offering lower price plans and try to improve on the network, as your network provides regular dropped calls. The staff overseas not very helpful the india call centre, half the time they cannot speak english properly and often transfer customets from departments to departments. Call centres and customer service which three provides would impact on the service the network would provide, three must improve in training staff to speak properly to staff as they often cannot understand customers, why not invest in re training your over seas staff.

  42. Wayne

    Well, I think it’s about time hat these ‘tie ins’ to 24 Month contracts ended, competition is increasing all the time. But having said that, I gues this does now mean that shorter contracts will increase substantially in price? I’ve been with Three right from their launch and although I do have contracts with Orange and O2, my personal and family phones are on 3.

  43. Pete

    You say you can support brand new tariffs that are bigger bundles that I personally would ever use or need but you give excuses to supplying extra little bits to existing lower usage tariffs…come on.

  44. Pete

    In 2003 I found the 3 Network and Skype and instantley fell for both, unfortunately due to personal reasons I wasn’t able to join the 3 network until last year…I’m beginning to feel I made a big mistake moving from O2 to 3…I have had so many problems with the network and I’ve even had at least 2 members of their staff offer to transfer my number for free…what does that say in itself…it is a very difficult network to get along with and it’s not getting any easier, if anything it’s getting worse.

  45. Pete

    @Mod Sedge – What other tariffs you have inroduced is irrelevant to me with all due respect…what I want to know is after supporting the terminate the rate campaign what is 3 going to offer to my 3Pay tariff..?

  46. Moderator: Sedge

    @ Pete – The changes to MTRs are slower than we’d like, but they do secure the generous price plans we introduced in anticipation of MTR drops, The One Plan and the bigger PAYG bundles. Unfortunately it will take Ofcom until 2014 to deliver the full benefit of the MTR reduction. The lower it goes, the more scope there is for competitive pricing. We don’t have anything further to announce right now, but we hope that The One Plan should more than meet most needs

  47. Pete

    After posting on all you can eat data on Payg blog regarding My 77 years young Mother who has no 3 signal in her house and 3 telling me that they had dropped there roaming signal in my Mums area in November 2010 I want to see 3 boosting there signal by whatever means because it’s got to happen that we can recieve 3 mobile signal in our homes…the future is computers in our phones and our phones will need to communicate with our homes can 3 not see this…?

  48. Pete

    I don’t think 3 will be dropping any charges on any tariffs…that’s not good business….I think or rather I hope they will add somethings to our tariffs so we get more for our pounds and pennies…any news Mods…?

  49. Missy

    Oh please don’t change prior tariffs unless it’s really going to add value. I was disappointed with recent changes to 3PAY tariffs especially in light of this news and more so when I received my first ALL IN ONE package which is less in value than the 3PAY deal. However with the all-you-can-eat data now available on £15 and £25 PAYG All in One, that has made the value, at least where data is concerned exceptionally positive and a challenge as to which product to select, specially for the longer term.

    I do encourage 3 to continue to enhance it’s market share by focusing on free SKYPE and Free 3 to 3 Minutes. Calls to Landlines and other networks are well covered by Voice Add-on products from the old Stretch (which I still use!) to WEPAY & 3PAY’s £25 for 500 minutes (this could be improved greatly to compare to the STRETCH value for money and in effect make my STRETCH SIM valueless.)

    Now all 3 needs to do is further enhance the stability of the data network and increase reception. The area I’m currently in is so poor at times. Data fails most days of the week between 3AM and 4 AM, usually at the most inconvenient of times, and voice reception is so poor calls drop out after a few minutes.

    I suspect it’s to do with the demolition of a building nearby which has Cell antenna on it and I suspect these were 3 and have been decommissioned, leaving us to fall back to two other local towers in the opposite direction.

    Consumers should push hard to drive 3 to provide even better product options, and 3 should use that market force to push other providers who wish to compete to bring out genuine market competition and of course these regulatory changes.

  50. Mike E71

    Ofcom seem to have been vary unfair on spectrum recently.

    http://mike-e71.blogspot.com/2011/03/terminate-rate.html

  51. Sam

    This is good news, not as good as it would have been if Ofcom would have stuck it’s ground, but still good.. Just hope all 3 contracts and PAYG charges are reduced, would be ironic if 3 didn’t reduce them after campaigning for it.

  52. Michael

    @Kaz – I think the bit near the end got me a bit worried :)

  53. Moderator: Kaz

    @Michael – I see no reason why we would drop all you can eat data.

  54. Michael

    I hope you don’t decide to drop all-you-can-eat data on The One Plan and pay as you go in light of this

  55. Moderator: Kaz

    @Pete – There are not any details on how this decision will affect any customers just yet. We will let everyone know as soon as possible.

  56. Pete

    @Mod – Kaz not quite what we wanted but a start I hope…anyway any news on what it will do for my 3Pay tariff…

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