Ben
1st September 2008, 04:55 PM
Regulators are currently considering whether to scrap the current way mobile networks charge for calls that are connected over their networks.
Currently, when you call somebody on a different network you pay your own network operator. Your network operator is then charged by the destination network operator, which means the price you pay has to factor all of this in.
Pay to Receive works differently. You pay your network just as before, but your network doesn't have to pay any other network to carry the call. Instead, a recipient of a call on a different network has to pay their own operator when they receive your call.
What are the benefits of Pay to Receive?
Well, some of them include:
More transparent - there is no 'hidden' termination charge that has to be factored in to what you pay.
More competition - smaller networks like Three complain that, as they have less subscribers, they have to pay out a lot more money to other networks. Larger networks connect more calls internally, so have fewer real costs. This makes things hard for new entrants, though regulators often level the playing field by mandating what the termination rates are for them. New entrants can also often charge other networks much, much more for calls to their subscribers - also evening things out.
Lower prices - only paying for part of all calls you make could result in them being significantly cheaper. However, you will lose out on what you receive - see below.
What are some of the negatives?
When receiving a call, recipients will need to consider that it is costing them money/minutes.
People who mostly receive calls will likely be worse off than before.
Only paying for outgoing calls could be argued as more transparent in terms of consumer price plans. Pay to Receive is unlikely to make already-complex tariffs any easier to understand.
Recipients will have to pay for unwanted calls.
Termination charges are a source of revenue for many companies who offer inbound calling services. Pay to Receive would disrupt this market.
While not really being talked about at the moment, SMS may also become Pay to Receive. As such, the recipient would be billed for SMS messages they do not even want, while the companies transmitting them may be able to do so for even less than is currently possible - increasing the volume of unwanted SMS.
For both calls and texts, Pay to Receive would likely cause widespread disruption to existing markets outside of the USA (where they pay to receive). There are advantages and disadvantages to the system. However, the biggest single advantage would appear to be for regulators - Pay to Receive means no termination rates to regulate, making their lives very easy indeed. So, if only the regulator really benefits, is there any point in making this massive change anyway?
What do you think? Vote and post your thoughts.
Currently, when you call somebody on a different network you pay your own network operator. Your network operator is then charged by the destination network operator, which means the price you pay has to factor all of this in.
Pay to Receive works differently. You pay your network just as before, but your network doesn't have to pay any other network to carry the call. Instead, a recipient of a call on a different network has to pay their own operator when they receive your call.
What are the benefits of Pay to Receive?
Well, some of them include:
More transparent - there is no 'hidden' termination charge that has to be factored in to what you pay.
More competition - smaller networks like Three complain that, as they have less subscribers, they have to pay out a lot more money to other networks. Larger networks connect more calls internally, so have fewer real costs. This makes things hard for new entrants, though regulators often level the playing field by mandating what the termination rates are for them. New entrants can also often charge other networks much, much more for calls to their subscribers - also evening things out.
Lower prices - only paying for part of all calls you make could result in them being significantly cheaper. However, you will lose out on what you receive - see below.
What are some of the negatives?
When receiving a call, recipients will need to consider that it is costing them money/minutes.
People who mostly receive calls will likely be worse off than before.
Only paying for outgoing calls could be argued as more transparent in terms of consumer price plans. Pay to Receive is unlikely to make already-complex tariffs any easier to understand.
Recipients will have to pay for unwanted calls.
Termination charges are a source of revenue for many companies who offer inbound calling services. Pay to Receive would disrupt this market.
While not really being talked about at the moment, SMS may also become Pay to Receive. As such, the recipient would be billed for SMS messages they do not even want, while the companies transmitting them may be able to do so for even less than is currently possible - increasing the volume of unwanted SMS.
For both calls and texts, Pay to Receive would likely cause widespread disruption to existing markets outside of the USA (where they pay to receive). There are advantages and disadvantages to the system. However, the biggest single advantage would appear to be for regulators - Pay to Receive means no termination rates to regulate, making their lives very easy indeed. So, if only the regulator really benefits, is there any point in making this massive change anyway?
What do you think? Vote and post your thoughts.