Vodafone has confirmed that, despite additional powers given to Oftel, it will cut call charges on 24 July only to raise them again the next day.
The telecoms watchdog has warned that it will use interim powers being drawn up by the Department of Trade and Industry (DTI) if operators choose to exploit a brief period between the ending of the UK telecoms licensing regime and the enforcement of a new European Union telecoms directive.
A Vodafone spokesman told vnunet.com: "We are complying with the current regulations. Yes, we will cut the prices and raise them again until the current period of uncertainty is over."
In order to comply with current UK licensing regulations, operators are obliged to cut termination charges to both fixed and mobile phones by up to 15 per cent by 24 July, after a Competition Commission investigation found that consumers were paying too much for calls.
The Commission recommended that this initial cut should be followed by three further annual reductions of 15 per cent.
But the current UK licensing regime ends on 25 July. The EU directive, which is to replace it, is now unlikely to come into force until September at the earliest.
To make matters more complicated, Vodafone, Orange and T-Mobile are lobbying Brussels to reverse the cuts.
Although it is expected that a ruling on further price cuts could be made by the time the UK licensing arrangements end, Vodafone plans to take advantage of the fact that price regulations are left in limbo by immediately raising prices back to the pre-24 July levels.
Oftel, which plans to fight back against this loophole, has insisted that this action goes against the spirit of the Commission's findings.
It warned operators that, if they decide to flout the original ruling, the DTI will implement statutory instruments that the watchdog can use.
"This will give Oftel sufficient regulatory powers until the new EU directive is in force," an Oftel spokeswoman told vnunet.com.
"Operators will also find that if they do raise the price they will only have more to cut when the next round of price cuts comes into force in April 2004."
But Vodafone was unimpressed by Oftel's stance. "This is something all the operators are going to do. We are aware of Oftel's position," it said.
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