Telecom, which earlier - in order to avoid regulation - offered to gradually lower the cost of switching calls between networks over the next six years; has apparently taken a U-turn, and is now unsure of passing on potential reductions in mobile termination rates to users.

It was specified by a Commerce Commission draft report last month that mobile termination rates would be dropped from 15 cents a minute to 7c immediately, and then would be decreased to 3.8c by 2015.

A voluntary commercial agreement was accepted by the Labor-led government in 2007, from Telecom and Vodafone to lower rates. The two mobile giants offered to cut rates from 15c to 11c in this latest round.

However, Telecom spokesperson Mark Watts says that now only gradual reductions to 7c by 2015 - just half of that sought by the commission - are possible.

Mr. Watts said: "In addition - and unlike the previous deal - Telecom is not committing itself to passing on the reductions to users."