Shares in mobile phone group Vodafone have dropped 1.75p to 131.05p after the UK's competition commission called for a 20% cut in mobile termination rates.
The long running row over these rates - the lucrative fee charged by the networks to carry calls from other operators - started in 2007 when BT and 3 argued that they were too high. The dispute went to the competition commission in March last year, and now the commission has agreed the fees are too high and has ruled they must be cut.
The move would see revenues at the mobile phone operators - not just Vodafone - reduced by around £250m. But the companies still have room to appeal the judgement.
Separately, analysts at Societe Generale have issued a sell note on Vodafone, with a 110p target. They said:
"Rising deflationary pricing in mobile voice could be magnified by consumers deciding not to re-invest the savings made in their telephone bill in more calls, opting instead to save them."
