The cost of calling mobile phones from landlines may drop for some consumers by as much as a quarter within weeks after the Commerce Commission slashed the fees telcos can charge one another for routeing calls and texts to mobiles.

The move by smaller providers could trigger a "domino effect", forcing larger phone companies to drop their prices too. However, Telecom and Vodafone are refusing to budge for now on any of their prices.

The Telecommunications Users Association urged people to call phone companies and demand to know what their new rates would be, and to shop around if necessary. "Telcos are coin-operated – if you want them to change their behaviour, you have to affect their bottom line," chief executive Paul Brislen said.

Telecommunications Commissioner Ross Patterson said cheaper prices for calls from mobiles would be entirely dependent on the "trickle-down" forces of competition. Dr Patterson said pre-pay mobile prices were high and usage "among the lowest in the world".

The commission said it would chop the fees mobile phone companies could charge one another for connecting calls to their customers from about 17 cents a minute to 7.5c today, and to just under 4c by next April.

The prices they can charge for passing on text messages to their customers will drop immediately from 9.5c to a "token" fee of less than a tenth of a cent.

Dr Patterson said phone companies would not be forced to pass on the reductions to consumers, but believed they would do so "in some form", either by cutting prices or offering improved service bundles.

Compass Communications chief executive Karim Hussona expected it would cut its prices for calling mobiles phones from fixed-line phones by an average of about 25 per cent from the start of next month. The company is the largest provider of phone cards, commonly sold at dairies, that consumers can buy to make cut-price calls from home phones.

Mark Callander, chief executive of New Zealand's third-largest fixed-line phone company, CallPlus, said it would make similar "substantial" cuts within days, passing on most of the fee reduction to landline customers. "It is a big win for consumers," he said.

TelstraClear said it needed to "assess the business impact before any specific announcement" but its policy was to remain competitive and its pricing was under constant review. Vodafone spokesman Hayden Glass said it had only a small number of landline customers but would "respond to competition".

Vodafone, Telecom and 2degrees have all maintained there is no reason for mobile call prices to fall as a result of yesterday's ruling.

Mr Glass said that was because lower fees would cancel out between mobile operators, leaving none better off. 2degrees said last month it had already factored in the cuts.

Telecom retail chief executive Alan Gourdie said it had dropped some of its prices in anticipation of yesterday's ruling during the past two months.

- © Fairfax NZ News