The Solomon Islands Government is to pay Solomons' Telekom Ltd 14 million US dollars in compensation for prematurely terminating its 15 year exclusive licence.
It is to be paid in two instalments for losses the company suffered on its fixed line network outside of Honiara.
A spokesperson for the Economic Reform Unit in the Ministry of Finance and Treasury says the amount includes compensation of 11 million dollars and three million for the losses on the fixed line.
But the spokesman also advises that there is now no commercial need for the company to keep the fixed line, so the Government may, over the next five year, subsidise losses on the line.
After this period, the spokesman says, the company could remove the fixed line because it could then be replaced by mobile phone services facilities.