4 Dec 2009

$70m bill for phone service to hard-to-reach areas

12:45 pm on 4 December 2009

The Commerce Commission says it cost Telecom $69.7 million to provide home phone services to customers in uneconomic areas in the last financial year.

The cost is less than the $70.7 million for the service the previous year, due largely to a drop in the corporate tax rate.

Telecom will have to pay 66% of the cost - about $46 million - and will be reimbursed the rest by the other telecommunication companies.

Vodafone will pay 26%, Telstra Clear will pay 6% and the other nine companies operating in the market, including 2Degrees, will together contribute less than 1%.

The commission's draft cost calculation will be finalised following a period of consultation with telecommunication companies.

Meanwhile, the regulator has calculated it cost Sprint International $2.15 million to provide a relay service for the hearing impaired.

Telecom, Vodafone and TelstraClear will have to reimburse the company more than 99% of the costs.