Prices of mobile phone calls could be set to fall in the wake of Ofcom 's announcement today of tough new price controls on mobile operators.

The regulator will impose limits on the wholesale prices that mobile networks can charge other operators for calls to their networks.

Known as termination charges, these can make up a significant portion of your bill. This cap is expected to lead to price reduction on mobile calls for consumers.

Ofcom believes these controls will save around £400 - £500 million over the four years covered by the regulation - savings Ofcom expects to see passed onto the consumer.

The new regulations were announced this morning and will come into effect on Sunday 1 April - representing a very quick turn-around for new regulation. While call termination charges have been regulated before, this is the first time such regulation has been imposed on the 3 network.

Strange timing

"It's been long anticipated, but the timing is very strange," Ed Brewster, head of corporate communications at 3 UK, told Tech.co.uk. "We're trying to understand what made Ofcom want do this now and why so fast.

"Though we haven't said we're going to, we haven't ruled out appealing. We don't believe these changes will bring any significant changes for the consumer. Ultimately, it's competition that keeps prices down and that's what we've been working on."

Rival network O2 agreed that competition alone was enough to drive prices lower in the mobile phone market. "In the end it's up to the consumer," an O2 spokesperson told Tech.co.uk.

"O2 believes costs should all be the same (for everyone) - so connection and termination rates should all be the same. The big change is for 3: before they used to get away with higher prices, now the regulation regime is being slapped on them too."

Orange , on the other hand, welcomed the news, saying it was encouraged by most of Ofcom's decisions.

"We are especially positive about the four-year charge control period which gives us greater stability as a business and allows us to deliver greater pricing stability to our customers."