Here is another article from SIMsurprise.co.uk giving you some useful information on Mobile Telephones, Sim Cards, and the Mobile Industry.
This article explains a little about how your call charges are made up by exploring Mobile Termination Rates (MTR) - or, more simply - what networks charge you for calling phone that is on a different network to the one that you are calling from.
What are Mobile Phone Termination Rates?
You are on a specific network, for example T-Mobile.
The person you are calling is on a different Network, for example Vodafone.
The receiving network, Vodafone, will charge T-Mobile for carrying the call.
Charges imposed by the networks vary slightly between networks, but at time of writing is typically around 4 pence (£0.04p) per minute.
This charge is included in the call cost of your network provider.
So, each network charges the other networks for using their "system" to carry a call.
Of course, the network the call is coming from does not absorb the other (competitor) Network charge - your network will pass this charge onto the caller - in this case you. Your network will probably charge you a little more than the competitor network charged your network - adding to the income your network is getting from you.
Calls to a person on the same network, for example Vodafone to Vodafone, do not incur this charge.
Hence, each network is able to promote cheaper calls to people on their own network.
The same applies to calling a mobile number from a landline, for example BT to Orange - Orange will charge a fee to BT for passing the call over Orange's network. BT then passes that fee to you. With BT possibly adding a little on top too, to add to their own profits.
Is it Legal for networks to do this?
Currently, yes, and it is quite a lucrative income for the networks, believed to generate billions of Pounds in income for all the networks each year.
While it is legal for networks to operate in this way there is currently little government regulation on how much the networks can charge.
However, Ofcom (Office for Communications), is being campaigned to investigate introducing tighter controls to reduce the amount that networks can charge.
It will be a balance between Business and Consumer
If successful, the investigation could see MTRs reduce to below 1p (£0.01p) per minute.
Some Networks encourage users to keep to their own Network by offering free calls to numbers on the same network.
Over recent months however many networks have been charging the same per minute call tariff irrespective of which network the number is on that you are calling.
Related News Article:
You might be interested in reading our News article about the changes that OfCom are imposing upon Mobile Phone Networks regarding Mobile Termination Rates.
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