1. Review of the charge control on calls to mobiles

2. Main milestones February 2001 - Consultation Document 26 September 2001 - Statement and proposed licence modifications 7 January 2002 - reference to the Competition Commission

3. Current Controls 1998 MMC Recommendations Charges reduced by 25% for 1999/2000 RPI-9% for 2000/01 and 2001/02 Controls saved consumers £1 billion

4. Breakdown of price of calling a mobile BT’s ppm daytime price to call Vodafone Price VAT BT’s keep Vodafone 20p = 3p + 3.5p + 13.5p

5. Conclusions in Statement weak competitive pressures on termination charges –calling party pays: no choice but to pay the charge of the terminating operator –incoming call costs not a significant factor to consumers –some evidence of substitutes and closed user groups but insufficient –little evidence of operators competing termination charges excessive in relation to cost, which means high retail prices

6. Market definition Separate market for call termination on each operator all 4 operators with market power

7. Proposed licence modifications RPI - 12% control on termination charges mobile to mobile charges as well as fixed to mobile runs for 4 years with a review after 2 applies to all 2 G voice calls

8. Regulatory proposal Proportionate and appropriate regulation Consumers will save c.£800m over 4 years. Peak retail price should fall from 20ppm to 14ppm by 2006 All four operators rejected proposed licence modifications

9. Competition Commission Reference CC has six months to make inquiry in the public interest seeking evidence from any interested party

10. Contact at CC The Reference Secretary (Mobile Phones) Competition Commission New Court 48 Carey Street London WC2A 2JT email: mobilephones@competition- commission.gsi.gov.uk