Mobile phone price war looms

Two of the UK's network operators have pre-empted an Oftel report into the cost of mobile calls to rival networks by launching new tariffs

One2One and Orange have kicked off a new mobile phone price war by offering new deals that will include some free calls to rival mobile phone networks.

The move comes as regulator Oftel is poised to release details of its investigation into the cost of phone calls between mobiles on rival networks. This report, which was expected to conclude that mobile users are being overcharged, seems to have been pre-empted by the two operators, although Orange told ZDNet on Monday that its package was not really aimed at consumers.

One2One will announce details of its new tariffs on Monday. The £25 per month package will include 100 minutes of free calls to any fixed line or mobile phone number in the UK. Once this free limit has been used up, calls to rival mobile networks will cost around 20 pence per minute.

Orange's new deal gives 200 minutes of free calls to all UK numbers, after which it will charge 29.5p per minute for calls to rival operators. Currently, a call to another network can cost up to 50p.

"Our package is open to anyone, but it's very much targeted at business users," explained an Orange spokeswoman. She said Orange believes that business people will benefit most from being able to call any UK number as part of their bundle of free calls.

Oftel's report is expected to conclude that mobile-to-mobile calls are too expensive. According to a recent leak the regulator is expected to demand a 20 percent reduction -- something which industry experts dismissed as inadequate.

It is unclear whether Vodafone and BT Cellnet will follow suit. According to Monday's Daily Telegraph Vodafone has said it is "highly unlikely it will follow suit", while BT Cellnet would only say that its prices were "under constant review".

Of course, should Oftel demand a cut in the cost of mobile-to-mobile calls, all four of the UK's mobile network operators will have to comply.

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