August 7, 2011 7:29 pm

Tribunal rules BT can raise mobile rates

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BT is set to receive a multimillion pound windfall after a tribunal ruled that it could charge higher rates to mobile network operators for connecting 0845, 0870 and 0800 calls.

The Competition Appeal Tribunal upheld BT’s challenge to a decision by Ofcom, the media regulator, that it could not increase its call termination charges to mobile operators for so-called “non geographic” numbers.

The ruling is likely to mean higher payments to BT and other wholesale landline network operators from mobile providers, unless they lower their charges to consumers.

The dispute began in 2009 when T-Mobile – now part of the Everything Everywhere joint venture with Orange UK – appealed to Ofcom to prevent BT from charging mobile operators for free calls. O2 and Vodafone, the mobile operators, then joined the dispute.

BT provides non-geographic numbers to companies for a fee, and at one stage had passed on a share of those fees to mobile operators for carrying calls.

However, towards the end of the last decade, BT began charging mobile networks for terminating calls to such numbers. Last year, Ofcom ruled that these charges were not fair and reasonable. In the latest CAT hearing, BT successfully challenged that decision by the regulator.

After a dense and highly technical 200-page judgment, all parties are still considering the likely impact of the decision. Ofcom is yet to determine how far payments should be backdated but BT believes that the ruling should enable it to recoup up to £19m in revenues lost as a result of the dispute from the second quarter of last year.

“It is appropriate that the CAT has ruled that BT’s wholesale termination rates for 0800, 0845 and 0870 numbers are fair and reasonable,” BT said. “We are currently examining the details of the judgment to understand the impact.”

BT Wholesale could also generate greater revenues from future calls, depending on mobile operators’ pricing decisions. The ruling allows for BT to levy termination fees for 0800 numbers if mobile operators charge more 8.5p per minute, but not if they price below that level. So-called “ladder charging” also applies to calls to 0870 and 0845 numbers, meaning that the more mobile operators charge their customers, the more they must pay to BT.

The details of this ladder system are yet to be finalised by Ofcom.

Mobile operators have a month to determine if they will appeal the judgment.

“Everything Everywhere is disappointed with the Competition Appeal Tribunal’s judgment,” the company said. “We are considering the lengthy judgment further and assessing next steps.”

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