Mobile phone customers in the United States pay for every minute they use their phones-including calls made to them. While many US customers object to paying for incoming calls, this pay-to-receive model actually costs US customers less than British customers pay for mobile phone service.
British customers may soon pay for calls they receive, however. At least, some mobile companies are threatening to implement charges for incoming calls. These companies are lashing out against a law backed by the European Telecommunications Commissioner, Viviane Reding.
Commissioner Reding’s law would mandate a significant cut in the Mobile Termination Rate (MTR). This is the fee mobile phone companies charge other mobile companies, and landlines, to connect to their networks.
Currently, MTR fees add an estimated 7 pence to the cost of each call made in the UK. Mobile phone companies collect about one billion-with a b-pounds per year from MTR. While Commissioner Reding believes that capping the MTR would reduce the cost of mobile phone services and eliminate red tape and bureaucracy from the system, mobile phone companies are unhappy with the proposed change.
The phone companies believe that limiting MTR charges to just 1p will eat into their profits. To combat this change, the mobile phone companies are threatening to charge customers for receiving calls. While Commissioner Reding agrees that no law prevents mobile phone companies from charging for incoming calls, her office believes such a charge is unlikely.
The difficulty for mobile phone companies is that any incoming call fees must be instituted by all the companies, at the same level. Commissioner Reding’s spokesman, Martin Selmayr, called the threat a bluff on the part of mobile phone carriers. “Companies could introduce tariffs that made you pay to receive calls, Selmayr said, “but most consumers will not tolerate this. They will go elsewhere.”
British mobile phone customers have never paid for calls they receive in the UK, although they do face roaming charges when they carry their phones abroad.
Phone companies who attempt to charge UK customers for incoming calls will face very angry customers. While the 7p MTR fee goes relatively unnoticed, customers will most certainly notice if their carrier tries to charge them for receiving a call.
Commissioner Reding’s proposal to cap MTR charges is opposed only by the larger mobile phone carriers. The smaller companies complain that they pay for the larger companies’ operations through MTR charges. The smaller companies are very unlikely to jump on board and charge their customers for receiving calls. Large companies who do institute charges would very likely abandon those charges quickly.
British customers may be surprised to learn how much money they have been paying in MTR charges. The likely result of Commissioner Reding’s proposal is outrage on the part of customers learning for the first time that they pay 40% more for phone service than users in the US.
Large phone companies may find that rather than deciding whether to charge customers for receiving calls, they’ll have to decide how much to cut rates to keep their current customers from going with smaller carriers.
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