Independent  retailers' group RGDATA has criticised Vodafone for cutting retail margins on mobile phone top-ups for the second year in a row.

Vodafone - which has a 56 per cent share of the Republic's mobile phone market - has reduced the retail margin on €10 and €5 electronic top-ups from 10 per cent to 6.5 per cent.

This follows a 2 per cent cut in the margin on physical top-up cards last year, when Vodafone (then Eircell) encouraged retailers to install electronic top-up terminals in their stores.

RGDATA director general Ms Ailish Forde said yesterday that the latest move was an example of a powerful company cutting its costs at the expense of small retailers.

She said that many of her association's 4,000 members took one-fifth of their annual turnover from top-up sales, with most of this comprising small-denomination transactions.

"Such drastic and clearly unjustifiable cuts are going to have a devastating effect on the types of card retailers will be able to sell," she added.

A Vodafone spokeswoman said the reduction in margins coincided with the company's introduction of extended service periods for pre-paid customers.

Customers will now be able to buy credit that will last for longer periods and can thus be expected to purchase fewer small-denomination top-ups.

The spokeswoman said that the Republic had the highest rate of electronic top-ups in Europe, with 85 per cent of Vodafone pre-paid customers choosing to purchase call credit in this way.