This determination sets out our resolution of the dispute brought by Telefónica O2 UK Limited against each of Vodafone Ltd and 3G UK Ltd.
The Dispute relates to the wholesale voice call termination charges set by each of Vodafone and H3G to O2 in October 2010. O2 considers that the October 2010 charges are an example of "flip-flopping". O2 describes flip-flopping as the practice of changing wholesale voice call termination charges on a monthly basis, and dramatically increasing the weekend charges in certain of those months.
On 12 April 2011, O2 submitted the Dispute to Ofcom, claiming that it was not fair and reasonable for each of Vodafone and H3G to levy the October 2010 charges.
Our powers and duties to resolve certain disputes are set out at sections 185 to 191 of the Communications Act 2003. In accordance with section 186(4) of the Act, on 16 May 2011 we decided that it was appropriate for us to handle the Dispute. We informed the Parties of our decision and published details of the Dispute, including the following scope, on the Competition and Consumer Enforcement Bulletin part of our website:
“The scope of the dispute is to determine:
(i) whether it was fair and reasonable in light of the prevailing regulatory regime for Vodafone and H3G to levy the charges which applied to the purchase of wholesale voice call termination services by O2 during the period October 2010; and
(ii) if not, what charges would it have been fair and reasonable for Vodafone and H3G to have levied on O2 for the purchase of wholesale voice call termination services during the period October 2010?”