NOTICE UNDER SECTION 12(2) OF THE TELECOMMUNICATIONS ACT 1984

PROPOSED MODIFICATION TO THE LICENCES OF BT CELLNET AND VODAFONE

1. The Director General of Telecommunications (the “Director”) in accordance with section 12(2) of the Telecommunications Act 1984 as amended by the Electronic Communications Act 2000 (the “Act”) hereby gives notice that he proposes to make modifications to the Licence granted to Telecom Securicor Cellular Radio Ltd (“BT Cellnet”) on 22 March 1994 and to the Licence granted to Vodafone Ltd (“Vodafone”) on 9 December 1993 by the Secretary of State for Trade and Industry under section 7 of the Act (together hereinafter referred to as the “Licences”).
2. The effect of the modifications which the Director proposes to make is to control the termination charges of BT Cellnet and Vodafone so that the average weighted level is reduced by a value of RPI12% in each of the four consecutive years from 1 April 2002 to 31 March 2006.
3. The reason for the proposed modifications is that Oftel, having completed a review of competition for calls to mobile phones, has concluded that competitive pressures do not impose sufficient constraints on mobile termination charges nor are they likely to do so in the near future. Oftel also concluded that each of the mobile operators have market power for call termination on their own networks. Having undertaken a cost benefit analysis, Oftel proposes controls on charges for termination of calls on the main mobile networks in order to protect consumers. The full details of Oftel’s conclusions and the reasons for them are set out in Oftel’s Statement of 26 September 2001 entitled Review of the charge control on calls to mobiles, September 2001. The full text of the proposed modifications is set out in Annex 7 of the Statement.
4. Oftel is simultaneously proposing modifications to the licences of Orange and One 2 One to introduce controls on their mobile termination charges.
5. The consultation procedure comprises two stages. In the first stage, representations on or objections to the proposed modifications may be made to: Selena Bevis, OFTEL, 50 Ludgate Hill, London EC4M 7JJ (telephone 020 7634 8844, e-mail (selena.bevis@oftel.gov.uk) by no later than 29 October 2001.
6. In the second stage, interested parties are invited to send comments to Selena Bevis, details as above, by no later than 12 November 2001 on representations and objections received in the first stage.
7. Any confidential information should be clearly marked as such and separated out into a confidential annex. All representations received by OFTEL, with the exception of material marked confidential, will be made available for inspection in Oftel’s Research and Intelligence Unit and may be published.
8. Any representations against the proposed modifications must be accompanied by a written statement that they are to be taken as objections to the modifications.
9. Copies of the proposed modifications, and a full list of licences affected, can be obtained from Oftel’s Research and Intelligence Unit at the above address (telephone 020 7634 8517, email mark.keane@oftel.gov.uk), and Oftel’s Statement Review of the charge control on calls to mobiles, September 2001 is also available on Oftel’s website at www.oftel.gov.uk.