British telecoms regulator Oftel has imposed fresh controls on the prices of calls to mobile phones, saying the move will save British consumers £800m sterling over the next four years.
But it said the controls were less tough than existing ones imposed in 1999, which will have cut prices by £1bn when they expire next March.
The new controls will cut prices by retail price inflation (RPI) minus 12 percentage points per year for four years.
Though this is tougher than the existing cap of RPI minus nine points, Oftel decided not to impose an additional one-off reduction as it did when it last reviewed the market and cut prices by 25% for 1999/2000.
Another change is that the controls will also apply to Orange and One 2 One, rather than just Vodafone and BT Cellnet as under current rules.
Operators had been lobbying hard for Oftel to ease controls, saying the market was competitive enough and the industry was struggling with massive bills to develop third generation mobile phone networks.
Some analysts believed the regulator was under political pressure to go easy on the networks after European mobile operators splashed out 120 billion euros for 3G licences last year.
Oftel said the controls would reduce operators' revenues by about £600m. They will not apply to 3G calls.
