New Zealand - Cutting charges will cost us $80 million, says Vodafone

[nz herald] Vodafone and Telecom have welcomed the Commerce Commission's recommendation to avoid regulation and allow the two companies to reduce mobile termination prices on their own, but Vodafone says it stands to lose a big proportion of its annual revenue through the changes.

After a 15-month investigation, the commission yesterday rejected regulation as a way of reducing the termination prices Telecom and Vodafone charged.

Instead, the commission recommended Communications and Information Technology Minister Steven Joyce accept Vodafone and Telecom's undertakings to reduce the charges on their own accord.

Under the 2001 Telecommunications Act providers can submit undertakings as an alternative to regulation.

However, a split has appeared in the commission, with one of the commissioners involved in the report, Anita Mazzoleni, disagreeing with the recommendation given to the Government.

"The barrier arising from the prices in the final undertakings continues to ensure an uneven playing field, and this will impede the benefits competition will otherwise deliver to New Zealand consumers," she said.

Cutting charges will cost us $80 million, says Vodafone