Ovum predicts change in international call billing

Research company, Ovum, has signed the death warrant of accounting rate with a report saying its days are numbered.

Accounting rate is the system used to work out how revenues from an international call are shared between the two telcos that connect it. Ovum claims it will be superseded by cost-based call termination services, such as International Simple Resale or Internet telephony.

Stephen Young, principal analyst at Ovum and co-author of the report, said: "This is good news for the customer. Accounting rate acts as a blocker to telcos seeking to cut prices of international calls."

According the report, the size of the global international telephony market will double in the next ten years, but its value will halve. It cites initiatives by the World Trade Organisation and the EU to drive down the price of international calls and the liberalisation of national telephone markets as the reasons behind the demise of accounting rates.

UK telcos are eager to see the back of accounting rate, which favours developing countries to the detriment of high telephony-using countries. A BT spokesman said: "We have been pursuing lower accounting rates worldwide. It is in our interests to ensure low rates so that we can pass savings on to our customers. Things are starting to change now that world markets are open to competition; what were once state-owned monopolies are now forced to negotiate. We have managed to drive down international call prices in this country by 22 per cent over the last year."