The recommendation for regulating the fees, which mobile phone companies can charge other telecommunications companies for routing calls and texts to their customers, has come from the Commerce Commission as it thinks that the current charges are enormously above the costs entailed for the service.

The Commission specified today in a draft that voluntary offers by Vodafone and Telecom to gradually reduce the charges should not be accepted. It further said that competition would be increased by cutting the charges, which would reflect the actual cost of routing calls to mobile, apart from lowering calling prices.

It said: "The Commission's preliminary view, based on its overseas benchmarks, is that the initial cost-based termination rates in 2009 should be 7.2 cents per minute for mobile voice calls and 0.95 cents per text, with these rates reducing to 3.8 cents per minute for mobile voice calls and 0.5 cents per text by 2015."

Commissioner Anita Mazzoleni has said that these benchmarked rates are notably below current wholesale prices in New Zealand of 15 cents per minute for mobile voice calls, and also extensively below the prices recently offered by Telecom and Vodafone in their undertakings, which simply continue with their current termination rates for voice.

Mobile phone companies were suggested by the commission to improve their voluntary offers, prior to its final recommendation to Communications Minister Steven Joyce, by December, on whether to impose the regulation.

If the recommended regulation comes to existence, the retail cost of calling a mobile from a fixed line phone could be significantly lower.

Mazzoleni concluded: "Where wholesale services are priced at cost, consumers are expected to benefit from the resulting increase in competition, which in turn should lead to lower retail prices."