'Rip off' mobile charges to stay

PHONE users will continue to be ripped off to the tune of around £10 a month after watchdogs backed away from demands to cut the cost of calling a mobile.

Ofcom will today announce it has decided against demanding reductions in 'termination' charges - the inflated amount mobile phone companies can charge for handling calls from rival networks or landlines.

But the news has sparked outrage from consumer groups amid claims that customers are being conned. Despite cuts in recent years, critics argue phone users are still paying too much when they call a different network on their mobile or make a call from a landline to a mobile.

Under the current rules, mobile operators are allowed to levy a 'termination charge' of around 6p a minute for the privilege.

That is on top of the normal charge for the length of conversation made by the customer's own network. Experts estimate that consumers are being ripped off by up to £200m a year by the practice. It means the average phone user is being overcharged by up to £10 a month because the cost is so high.

Bill Mieran, chairman of consumer group the Tele-communications Users' Association, argues that the charge should be halved to around 3p. He say: 'Consumers are still paying far too much for these charges. It would be extremely disappointing if the regulator does not do anything. Customers deserve a better deal from mobile operators.'

Since 2004, Vodafone, O2, T-Mobile and Orange have been forced to slash 'termination' charges by 30%. But consumer groups had hoped that Ofcom would ask for further cuts from March next year when the current pricing regime ends.

However, the regulator is today expected to let the companies off the hook in proposals on a new regime. It is expected to favour the status quo, allowing the Big Four to continue charging around 6p a minute to connect a call until March 2007.

The watchdog argues that the 30% cut has already left consumers about £900m a year better off. It says it must balance the needs of consumers with those of the industry to cover the costs of connecting people.

BT joined calls for a better deal for customers as soon as possible and wants a further fall in the termination charge. That would lead to cheaper calls from its landlines to a mobile. Gavin Patterson, consumer managing director at BT, said: 'The mobile operators are still charging significantly higher prices for call termination than is necessary ? this punishes customers who make frequent calls to mobiles.'