British mobile phone companies will have to cut the rates that they charge each other for connecting calls to rival networks by up to 21%, according to the watchdog Ofcom.

Setting price controls for the next two years Ofcom said that Vodafone and O2 must cut their average mobile rates to 4.7 pence per minute - a cut of over 8%. T-Mobile and Orange will have to cut their rates to 4.8 pence per minute, a cut of 11%.

Ofcom wants all the operators to charge the same amount by the end of March 2011.