8 Dec 2008

New Zealand Communications to share phone service bill

12:54 pm on 8 December 2008

A company that plans to become the New Zealand's third mobile phone operator will foot a small part of Telecom's bill for providing a local telephone service in uneconomic areas.

The Commerce Commission says New Zealand Communications is among the telecommunications companies that will share the bill, even though it is not yet offering a phone service to New Zealanders.

In its draft calculations, the regulator says it cost Telecom $70.7 million to provide a local phone service in uneconomic areas in the 2007/08 year.

That is $8 million more than the previous year's cost, and $12.5 million more than two years ago.

Telecom will foot 70% of the bill, and other telecommunications companies that use its network pay the rest.

For the first time, New Zealand Communications will make a payment, because it operates an inbound roaming service for international visitors. Its share is tiny at 0.001% , or about $700.

New Zealand Communications is not yet offering a phone service domestically, but is building cell phone towers.