The extraordinarily high price of mobile phone calls looks set to be reduced, if the European Commission's proposed price cuts, released last week, are taken up. But Oftel wants far more swingeing cuts than the EC.

Mobile phone firms currently charge landline operators, such as BT, high prices for connection to their networks. An average three-minute call from a landline to a mobile phone costs around 60p, 39p of which goes straight to the mobile operator.

The EC, due to release its final decision possibly as early as next week, wants the charges to be reduced by three percent.

But telco watchdog Oftel said these cuts should be nearer 12 percent.

These so-called termination charges, which Oftel asked the EC to look into, account for around two-thirds of the cost of mobile phone calls.

"Because the caller has no choice over which network is being called and the price they have to pay for the call, there is no incentive for the mobile operators to reduce their charges for carrying calls onto their network," said David Edmonds, Oftel's telecommunications director general.

"I am confident that charge controls are an appropriate measure to protect consumers," he added.

But the mobile operators, already burdened with huge debts from purchasing 3G licences, have complained to Oftel that they cannot afford to make these cuts.

"We appreciate that mobile operators have to make a profit and we will be discussing matters with them before any changes are made, but what is essential is that customers are getting value for money," added Oftel's spokesman.

The proposed rules could save consumers around £200m a year.