Firms fail to agree on cellphone termination charges

Commerce Commission invites Vodafone to endorse Telecom's mobile termination offer

Efforts to reach a voluntary deal on mobile termination rates may have fallen at the final hurdle after Telecom failed to persuade Vodafone to agree cuts deep enough to win over the Commerce Commission.

But the commission said it would delay making a recommendation to Communications Minister Steven Joyce on whether to regulate mobile termination charges until early next year, giving the firms until Tuesday week to submit any "final revised" offer.

The commission blames the fees for artificially inflating the cost of calls to and from cellphones. Last month, it invited Telecom and Vodafone to iron out differences between voluntary offers they had made to cut the charges.

Telecom and Vodafone submitted a joint proposal based on Vodafone's suggested pricing, but the commission said its preliminary view was that it was not good enough.

It wrote to the companies last night indicating that an earlier offer by Telecom could be the basis for a voluntary deal, however — effectively inviting Vodafone to endorse Telecom's offer rather than stick to its own.

Vodafone has warned that even its own proposed cuts would cost several hundred million dollars over five years, threatening investment and deals for occasional cellphone users.

That warning has been dismissed as scaremongering by third operator 2degrees, which stands to benefit from any reduction in mobile-to-mobile termination fees.

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