Watchdog rapped for 'higher than necessary' call charge ruling

Ofcom's proposed curbs on mobile phone termination charges were criticised by the European Commission today.

The regulator's suggested price caps are higher than necessary and could mean higher costs for phone users, the Commission said.

Termination charges apply when mobile phone companies receive calls from rival mobile or landline network operators. Ofcom's current price caps on those charges expire at the end of March 2007.

The regulator has put forward plans for new charges to be brought in which would reduce them to 5.3p per minute for Vodafone, O2, T-Mobile and Orange.

The regulator wants termination charges imposed on phone company 3 for the first time at 6p per minute.

In a letter to Ofcom, the European Commission said the regulator's proposed new tariffs were keeping the charges "higher than necessary". The Commission is asking Ofcom to reconsider its valuations.

It said in a statement: "Ofcom's approach would be detrimental to fair competition in the UK's mobile market and lead to higher prices for consumers."

The Commission said Ofcom had overestimated the costs incurred by the network operators when it drew up the proposed termination charge limits.