12 Aug 2009

Vodafone offers farmers $30m in subsidies

9:07 pm on 12 August 2009

Mobile operator Vodafone has offered New Zealand farmers almost $30 million in subsidies if rival Telecom releases a secret list of customers Vodafone helps to subsidise in rural areas.

Under an agreement, New Zealand phone companies including Vodafone subsidise about 60,000 Telecom customers at a cost of $58 million a year for services in hard to access areas.

Each year, Vodafone's share of the subsidy costs it $18 million.

Vodafone says Telecom has closely guarded the list of customers in hard to access areas.

Under a partnership deal with broadband satellite provider Farmside, Vodafone is offering to pay $500 toward installation of a satellite for anyone on the list.

Vodafone chief executive Russell Stanners says he hopes this will encourage farmers and others in rural communities to lobby the Government to force Telecom to release the information.

Mr Stanners says if everyone had access to broadband and a choice of which phone company to use the subsidy would not be necessary.

However, Telecom says it will not reveal the secret list of customers it receives subsidies for.

Telecom acknowledges the current subsidy system is problematic and say it would support a tender system for servicesin hard to access areas.

Communications Minister Steven Joyce says it is not his place to force Telecom to release the secret list of customers.

Mr Joyce says the Government has its own concerns about the subsidy and is in the process of conducting a review.

The Commerce Commission is considering a request from Vodafone for the information.

Vodafone-Farmside service

The Vodafone-Farmside service will start in September. Farmers within Vodafone's coverage area will be offered free installation, a landline and broadband connection for $80 per month and free national calling.

Farmers outside the mobile coverage area will be offered free satellite installation and pay $99 per month for a landline and broadband connection.

Farmside already has 10,000 rural subscribers.