Published on: 14th Jul 2014
The UK’s dominant landline operator, British Telecom has won a court battle with the mobile networks over the cost of terminating so called freephone calls on its network.
Although termination rates are generally set by the regulator as a fixed rate, often based on the cost of the service, BT introduced a termination rate for free phone calls that was based on how much the mobile networks charged for the call.
Although calls to 0800 numbers are free from landlines, some of the mobile networks charge for those calls. BT’s proportionate termination rate would have seen it collect more from the charging networks, and nothing from the mobile networks that also offered free calls to the 0800 numbers.
Initially, the telecoms regulator, Ofcom upheld protests by the mobile networks against the new costs, but the Competition Appeal Tribunal sided with British Telecom. A subsequent appeal court then sided back with Ofcom and the mobile networks.
Now, the UK’s highest court, the Supreme Court has returned the judegment in favour of British Telecom
Following the ruling, British Telecom said “We will now start proceedings to recover the money that has been refunded to the mobile operators since the Court of Appeal ruling.”
BT introduced the new regime in 2009, and since then the mobile networks have continued to charge for freephone calls. The financial benefit to BT from the backlog of charges is said to be in the low tens of millions of pounds.
It added that the company will “also be pursuing claims for further termination charges subsequent to that ruling. Such pricing was designed to benefit UK consumers by incentivising the mobile operators to lower their retail prices.”