The UK Network provider 3 is set to make substantial gains from termination rate cuts. The UK regulator for the communications industries, Ofcom has decided to reduce mobile termination rates from around 4.3p per minute to 0.5p per minute by 2015 enabling users to make cheaper calls to mobiles.
Kevin Russell, the CEO of 3 Networks announced that the UK mobile network operator would target to increase its customer base following the decision taken by Ofcom. The network provider expressed hope that the move taken by Ofcom would save millions of customer money.
However, according to some experts, slashing the MTR could lead to a negative impact on mobile phone deals as other mobile operators may increase costs to compensate for the lost revenue.
The CEO of another UK network operator O2, Matthew Key said, "Ofcom is moving one of the key elements in the equation and we can’t just sit by and let this happen. Clearly, we need to change our business model to do something to compensate".
As T-Mobile will be completing its merger with Orange in the next few months, 3 Network is likely to get a boost by Ofcom’s decision and will make profit for the first time ever.
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