Vodafone takes price fight to the High Court

Vodafone is seeking a judicial review of the Commerce Commission's proposal to regulate the price of land-to-mobile phone calls.

The mobile phone company filed papers in the High Court at Auckland on Wednesday.

Communications manager Sarah Williams last night confirmed the move but said Vodafone would not be making any further comment.

In his final determination last month, Telecoms Commissioner Douglas Webb suggested that "termination rates", or the price the public pays for landline to mobile phone calls, were too high.

Mobile phone network providers had told the commission such calls cost them 27c a minute.

The commission, comparing the rate to other OECD countries, estimated it should be about 15c.

It said the price paid by customers should fall accordingly.

Customers on Telecom's basic home plan pay 99c a minute for calls from landlines to mobiles during peak times. The proposed regulation could cut that to 87c.

The commissioner expects regulation to bring increased competition and lower prices, which would mean a saving of about $81 million in 2006 for landline customers.

The recommendation is being considered by Communications Minister David Cunliffe.

Vodafone has said regulation will not benefit consumers.

Vodafone finance director David Sullivan told the Business Herald last month that the cost of other types of calls could rise to offset lost revenue.

"Clearly, it's an important revenue stream for us and, by the regulator coming in, it's going to impact on the revenue we receive for mobile termination rates.

"There's not one component that we would look to change, but clearly when we lose a significant revenue stream through regulation you have to look at your overall pricing."

Sullivan said then that the only beneficiaries of regulation would be the fixed-line providers - Telecom and TelstraClear - who would have the option of making more on calls to mobile phones.

"He's effectively asking Vodafone to subsidise to Telecom the price of calling with a belief that by doing that, Telecom out of the goodness of their heart, will reduce prices to their customers."