Telecom and Vodafone say the Government's decision to regulate mobile termination rates is unwarranted and unnecessary.
The cost of mobile phone calls looks set to become cheaper after Communications and Information Technology Minister Steven Joyce said he will regulate the fees networks charge when a customer calls or texts a rival network.
Mr Joyce says regulation will improve competition in the mobile market and result in lower prices for cell phone users.
Mobile company 2degrees, which has been in operation for a year, has welcomed the decision, saying it creates a level playing field.
Chief operating officer Bill McCabe says the decision is encouraging and mobile phone users across all networks should expect significant reductions in call charges once the regulation takes effect from the end of September.
However, Telecom says the mobile market is already highly competitive and it is disappointed with Mr Joyce's decision.
Vodafone, which has the most mobile customers in New Zealand, says further regulation will only interfere in what is proving to be the most competitive part of the overall telecommunications sector.
Vodafone says it sees no evidence that there will be material benefits to mobile or fixed-line customers from regulating the rates.
The decision to regulation mobile termination rates follows a recommendation by the Commerce Commission earlier this year
The commission originally opposed regulation, but changed its mind after Vodafone launched a deal that significantly favoured customers calling others on its own network.
Changes must first be made to the Telecommunications Act, then the commission will set prices and other terms that mobile networks must follow over the next few months.
Change long overdue - TUANZ
The Telecommunications Users Association of New Zealand is urging Telecom and Vodafone to drop surcharges on cross-network calls and texts before the Government forces them to do so.
TUANZ says though it welcomes the Government's announcement, it is one that should have happened a number of years ago.
Chief executive Ernie Newman says competition has been restricted for too many years by market leaders.
Mr Newman says over that time, consumers have paid hundreds of millions of dollars of excess charges to mobile networks.
