Sharechat Logo

Vodafone's subsidy to rival set to climb while govt mulls new TSO scheme

Tuesday 10th November 2009

Text too small?

Vodafone New Zealand, the country’s largest mobile phone network operator, will probably have to fork over more money to rival Telecom Corp. after the regulator released its draft determination on the cost allocation for providing basic phone services to rural customers.

The Commerce Commission has decided Vodafone’s share of the Telecommunications Service Obligation (formerly known as Kiwishare) is 26.17%, up from 26.07% last year. Vodafone had to pay $19.46 million to Telecom last year.

TelstraClear NZ Ltd., the New Zealand unit of Australia’s Telstra Corp., will have to pay Telecom 6.38% of the obligation. The regulator will make a final decision on the amount of the levy at an as-yet undisclosed time.  

The TSO’s predecessor, Kiwishare, was put in place in the early 1990s when Telecom was privatised to protect the approximately 60,000 customers deemed to be not commercially viable.  

In September, the government announcement changes to the levy system in a move to remove any gain Telecom can get from the subsidy, and will use a new levy scheme to bankroll its rural broadband initiative. Under the proposed scheme, all operators will be able to compete for the non-viable customers’ service.  

Last week, Telecom slammed the government’s proposal saying its assumptions were “flawed” and denied it had benefited from the scheme. 

The country’s largest phone company estimates the obligation cost the company $74.3 million this year, according to John Wesley-Smith, Telecom’s general manager group industry and regulatory, who wrote to Telecommunications Commissioner Ron Paterson in September.  

Shares in Telecom were unchanged at $2.52 and have climbed 10% this year.  

 

Businesswire.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Telecom Corporation of New Zealand (TEL)
Telecom in drive to latch on to growing data usage with 4G mobile launch next month
Telecom lines up to buy 700MHz spectrum to extend reach of 4G network
Telecom backs setting copper prices until 2020, warns against getting too far away from input cost
Telecom puts $60M price tag on new Auckland data centre, Hawkins, AECOM win build
Telecom ends jobs purge, looks for ‘more sophisticated’ ways to save money
Telecom FY earnings fall to bottom of guidance range, sees unchanged dividend in 2014
Telecom takes spat with Vodafone to regulator after dropping court action
Telecom unbundling key to regulator's copper conundrum
Telecom lures customers to faster services in EPL deal