3 Dec 2009

Vodafone loses appeal over TSO fees

7:22 am on 3 December 2009

Vodafone has lost a Court of Appeal case over the way the Commerce Commission calculates the cost of providing local phone services to unprofitable customers.

Two of the three judges hearing the case rejected Vodafone's appeal against the $17.9 million it paid to cover the Telecommunication Service Obligations (TSO) in the 2003/2004 financial year.

The TSO fees compensate Telecom for providing residential phone services to customers who are deemed to be commercially non-viable, such as those in remote rural areas.

Vodafone argued the levy should have been calculated on the basis that an efficient service provider would have used existing mobile technology sites, and the commission overstated the cost by failing to adopt that methodology.