ORANGE, one of the region's biggest employers, is considering seeking a judicial review of a controversial report on the mobile phone industry.

The telecommunications company, which employs 5,000 staff at its call centres in Darlington, Peterlee and North Tyneside, released a statement last night following a report by the Competition Commission that criticised mobile phone operators for overcharging customers.

The report said telecommunication companies were overcharging customers by up to 40 per cent for termination charges, which typically make up about two-thirds of the cost of a call.

Callers to mobile phones had no choice but to pay the charges, it said, giving operators little incentive to bring the rates down closer to what it costs them.

David Edmonds, director general of telecommunications, has ordered the big four operators, including Orange, to cut termination charges by 15 per cent by July 25.

He will also consult on proposals for mm02 and Vodafone to reduce their charges by another 15 per cent, minus inflation, and Orange and T-Mobile to cut their rates by 14 per cent, minus inflation, for three years until 2005-2006.

BT has indicated it will pass on to its customers the cuts ordered by the regulator.

Last night, Orange said intervention by the commission would result in price increases for mobile phone customers.

The reduction in termination charges would lead to lower prices for fixed line customers, which would be offset by effective price increases to mobile users, it said.

John Allwood, executive vice-president of Orange UK, said: "Orange will have to implement the commission's directives, minimising the adverse impact on our customers and trading partners, and ensuring that the charges are financially neutral for Orange.

"At the same time, we are considering requesting a judicial review to ensure that the commission's report does not unfairly penalise mobile customers."

Oftel, the telecoms regulator, put forward alternative proposals for cuts in July 2001 which it said would save customers £800m over four years.

Operators rejected the offer, which has resulted in the commission's inquiry.