Telecom and Vodafone settle TSO cases

Settlement details confidential

Telecom and Vodafone have agreed settlement terms for six years of Telecommunications Service Obligation determinations.

In a joint media release both telcos state this is a full and final settlement on TSO-related issues that are currently before the Supreme Court and the High Court.

The proceedings relate to Commerce Commission’s TSO cost calculations for the years 2003-04, 2004-05, 2005-06, 2006-07 and 2007-08. The terms of the settlement are confidential.

Under the TSO-regime the Commission calculated the amount telcos were expected to contribute in order to maintain a universal telephony services. The amount was then handed to Telecom, who provided those services.

Vodafone has long disputed the payments to its competitor, which amounted to millions every year. For example, in the 2007-08 year, Vodafone was liable for more than $18 million.

Telecom group general counsel Tristan Gilbertson says the settlement today “draws a line under a long-running, protracted legal process”.

The two companies have now partnered to roll out the Rural Broadband Initiative, which will be mostly funded by an industry levy to replace the TSO.

“As most observers will know, the TSO funding regime has been replaced with a new arrangement for the funding of rural telecommunications services, and Telecom and Vodafone have recently embarked on a joint programme to greatly enhance broadband delivery across rural New Zealand,” says Gilbertson in the statement.

“Time has moved on and against this backdrop we’ve agreed it is time to put the disputes of the past behind us, so we can focus on the future.”

Vodafone general manager corporate affairs Tom Chignell says: “We are pleased to settle these disputes and put all our energy into delivering great products and services for customers.

“Our focus today and in the future for rural New Zealanders is delivering broadband – and increased mobile coverage – through the Rural Broadband Initiative."

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