Telefonica fails in bid to claw back 'flip-flop' 2010 termination charges Ofcom acted properly when setting mobile termination rates - the money one operator must cough to another for terminating a call on its network - the Competition Appeal Tribunal has ruled. The UK's second-largest telco, Telefonica/O2, had appealed to the tribunal over Ofcom's ruling in a dispute between the big Blighty-side mobe …
Possibly the crappiest analogy ever posted on the Reg. If you're going to use a fishing analogy - try this one:
Based on last year's data you're told you can only catch an average of 10tons of cod per weekend in October, but one fishing captain realises last October had 4 weekends in it and this October has 5, so after catching 10tons per weekend for the first 4 weekends he finds that he can now catch 20 tons in his final weekend because the average over this October would still work out to be 10tons per weekend.
That BTW is also a fairly crappy analogy but you started it and mine is at least somewhere close to accurate.
When you lead of course it is easy for others to copy and start to catch up but I have no doubt if it was not for Apple there would not be such good 'other' hardware out there.
Anyway this is OT - basically telefonica are suckers - they probably thought they would play it straight and then make the others 'look bad' later but it didn't work out - either that or they were just outsmarted by the others.
When you set a boundary / rule - you should expect people to try and find ways around it. It's the fault of ofcom if they did not do it properly in the first place - you can't really blame the others - especially when all the others were doing it.
>> And long may the networks continue to charge each other the termination rate
I don't think there has been any suggestion that there should be no termination charge - just one that's set at a level that doesn't distort competition. What was happening a few years ago was that network A would charge a stupid rate to it's competitors that was way above what it actually cost. So if you were with A and called another user on A, you might pay (say) 10p/minute. But if a user on network B, you might find it cost (say) 50p/minute to cal the same recipient.
Of course, network B did the same, so a user on A would also be fleeced calling a user on B.
Thus there was a huge price penalty calling someone on a different network.
Up to a point this could be just put aside as a matter of competition. But it started getting really problematic when number portability came in. Take the same two users as in the first example, user 1 calls user 2, and expects to pay (say) 10p/minute as his number says he's on the same network (A). But user 2 have ported his number to network B - so user 1 gets a shock when his bill arrives.
It's even worse when there are inclusive call allowances. The user may expect the call to be "free" as it's within his inclusive minutes bundle - but in fact it's not so it's not a case of getting a bill for 5x what he expected, it's a case of getting a large bill where nothing at all was expected.
Thus OfCon insisted on a cap on termination rates to level things out a bit. The networks don't really lose form it as they end up paying less out as well as getting less in. However, they don't like it as it removes their excuse for fleecing customers calling other networks - and so they get less revenue from their own users. It also removes the incentive for their users to persuade their friends to all join the one network so as to get the lower intra-network rates.
They can still offer incentives to get all your friends on the same network.
For example, some providers still offer unlimited free calls within their network, while external calls come from the inclusive minutes.
Number portability means that you have to know that your friend is on the same network instead of guessing from the number, which further encourages you to tell your friends which network you're on - thus more word-of-mouth advertising.
So it still works.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
