Wednesday 19th October 2011
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Telecom has continued its rush to settle outstanding disputes ahead of next month’s vote to split the company, reaching a deal with the Commerce Commission to repay broadband customers overcharged for incorrect meter readings.
The country’s biggest phone company paid out $2.7 million to some 47,000 customers who were overcharged after a software glitch meant people hit their data limits early, the antitrust regulator said in a statement.
Telecom and the commission reached a settlement after the phone company acknowledged the fault and sought to compensate its customers, meaning the regulator would waive its right to issue legal proceedings for a breach of the Fair Trading Act.
“We’re pleased to have reached a settlement with Telecom and they have made prompt refunds directly back to the customers who have lost out,” competition manager Stuart Wallace said. “The settlement is the best possible outcome for those customers and avoids potentially lengthy and costly court hearings paid for by taxpayers.”
The settlement comes after Telecom flagged it would credit affected customers in June, and is the latest in a string of deals cut before shareholders vote on whether to approve a demerger between the company’s retail and network units. Earlier this week, Telecom agreed to pay $31.6 million to five rivals for overcharging for its broadband services.
Telecom put forward a demerger proposal in an attempt to tap $1.35 billion of government funding to build a nationwide broadband network and shed regulatory oversight, which it claimed was overly burdensome.
If investors agree to the deal at next month’s annual meeting, Telecom’s Chorus network unit become a standalone listed entity, at a benefit of some $500 million to shareholders based on the Crown subsidy, according to independent adviser Grant Samuel’s report.
The shares rose 0.2 percent to $2.545 in trading yesterday, and have gained 17 percent this year.
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