According to Victoria University economist Bronwyn Howell changes being made to New Zealand's Telecommunications Service Obligations (TSO) Deed could ultimately kill Telecom. Did she mention Telecom's sponsorship of the Institute at Vic Uni for which she has done work in the past? If Telecom's existence is really reliant on ill-gotten gains from the hated TSO levy then the company is in weaker shape than first thought.
Telecom faces no competition for providing TSO services - yet the industry is currently forced to pay it $60-$70 million of dollars each year to allegedly provide such services. Worse still no one checks to see that Telecom actually invests that money into rural NZ. In the meantime the TSO levy continues to act as a penalty for Telecom's competitors as well as a guaranteed income stream for Telecom. Most international commentators cannot comprehend why Telecom should have been given this privileged position for the last nine years. Now at last the government is moving to tackle this roadblock to competition and new investment in rural telecommunications. Well done Steven Joyce. This week has been a good week for rural telecommunications users and for competition.
Disclaimer: the writer is employed by Vodafone NZ. Views expressed here are the author's own views.
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