Ofcom orders cut in mobile phone charges

The price of calling a mobile phone in Britain is set to fall further after Ofcom has proposed cutting the cost operators can charge each other to connect calls on to their network.

The cost to networks, known as mobile termination rates, are set in Britain until 2011 and Ofcom had launched a review to examine how they should be set after that period.

On Thursday the regulator unveiled plans to cut the rate from around 4.3 pence per minute to 0.5 pence per minute by March 2015.

"As rates fall and operators adapt, consumers will benefit from cheaper calls and competition in both the UK fixed telecoms and mobile markets," Ofcom said.

The topic has gained prominence in Britain after smallest operator 3 and fixed-line telecom group BT led a campaign to get the rate either cut or dropped entirely.

However the proposal is likely to disappoint the larger operators, including Telefonica's O2, Vodafone and the new merged entity from T-Mobile and Orange.

The European Commission had urged the British telecoms regulator to impose appropriate price control.