A recommendation from the Commerce Commission that mobile termination prices should be regulated is seen as positive for the consumer but negative for Telecom, New Zealand's largest listed company.
Telecom shares ended down 1c at $2.73 yesterday.
Mobile termination prices are the wholesale charges mobile-phone companies charge for terminating calls or texts from other fixed or mobile networks.
The commission has recommended termination charges be halved this year and significantly reduced further by 2015.
The commission's preliminary finding, which is now subject to consultation, is that mobile termination charges are now significantly above cost.
The draft report recommends regulation of the wholesale rates that telecommunications companies charge each other, rather than the price consumers directly pay for mobile services.
Commissioner Anita Mazzoleni said that, where wholesale services were priced at cost, consumers were expected to benefit from the resulting increase in competition which, in turn, should lead to lower retail prices.
In the mobile market, the above-cost wholesale mobile termination charges were likely to limit the ability of a new entrant mobile phone company to compete.
"Overall, the commission has estimated that the retail cost of calling a mobile from a fixed line could be significantly lower as a result of regulation," she said.
Forsyth Barr broker Peter Young said termination rates were a complicated area and the market appeared to believe the recommendation was negative for Telecom.
The commission was proposing an approximate halving of the mobile termination "glide path" proposed by Vodafone and Telecom.
Their proposed paths started about 14c and fell to 10c by 2014. The commission proposed 7.2c falling to 4.3c. The proposed rates would be negative for Vodafone, probably by up to $30 million a year if the termination rate was halved this year, he said.
Telecom would see an equivalent saving on termination rates to Vodafone but also a reduction in profits arising from fixed-to-mobile calls terminated on its own network.
The commission was also investigating whether national roaming should be regulated, but that only affected Vodafone through its roaming agreement with new entrant 2Degrees.
Vodafone and 2Degrees already had a commercially negotiated roaming agreement but the commission had not been happy with the process so far, Mr Young said.
