The Commerce Commission has recommended that the Government fix the cost of switching mobile phone calls between networks.
The decision has been expected since Vodafone announced that it planned to introduce a calling plan heavily favouring its own network. That prompted the commission to complain that new entrants faced unfair barriers to expansion.
The commission wants the Minister for Communications and Information Technology, Steven Joyce, to impose cost-based mobile termination rates, arguing that that's the the best way to ensure vigorous competition.
Vodafone and Telecom had urged Mr Joyce to accept a voluntary reduction in rates.
2degrees 'can't compete effectively'
Vodafone is disappointed by the development, saying 2degrees has had no problems attracting more than 200,000 customers since launching last August.
But the chief operating officer at 2degrees, Bill McCabe, says it can't compete effectively if Vodafone and Telecom can charge it more than they charge their own retail customers.
Mr Joyce has called for submissions by 29 June before he considers his decision. A spokesperson wouldn't be drawn on how long that would take.
