Mobile phone group Vodafone yesterday announced a 23 per cent reduction in the price it charges other operators to call its network outside peak hours.

The change, which comes into effect on January 1st, comes two weeks after O2, the group's closest rival in the Republic, said it would lower its so-called termination rates by 8 per cent from January.

The cuts will not have any impact on Vodafone's two million customers in the Republic, but will benefit users of other mobile or fixed-line networks when they call a Vodafone mobile during the evening or at night. This is known as the mobile termination rate.

Since January 2001, Vodafone has reduced its mobile termination rate by 50 per cent, effectively halving the cost of phoning a Vodafone mobile from another service provider. The company said this equates to a €247 million saving over the period.

"As the market leader, we are always looking at how we can deliver better value to our customers," said Carolan Lennon, marketing director for Vodafone Ireland. "Our latest reduction means Vodafone continues to offer some of the lowest mobile termination costs in Europe."

Last month, ComReg, the communications regulator, issued a report saying that Irish consumers are paying more than their European counterparts for mobile phone services.

According to the report, Ireland ranked 13th out of 19 EU states for charges for high mobile phone usage in August. It ranked 11th for medium usage and ninth for low usage. Tariffs for prepaid users were rated sixth cheapest.

The regulator blamed poor competition for what it described as "stubbornly high" charges in segments of the market. Up to recently, Vodafone and O2 have enjoyed almost 90 per cent of the market between them.