Vodafone Seeking Change to Kiwi Share

By STEEMAN, Marta

Vodafone is making a concerted push in 2006 to have the Kiwi Share overhauled after being hit with a $28 million bill in the past three years to subsidise Telecom for providing telephones to uneconomic customers.

The New Zealand arm of the British cellphone giant is gathering support from small telephone companies for a comprehensive overhaul of the 15-year-old Kiwi Share deal between Telecom and the Government.

The Kiwi Share was updated in late 2001 and is called the Telecommunications Service Obligations (TSO).

A key change was that other companies had to share in the cost of providing telephone services to “commercially non-viable” customers.

For the year to June 2004 the Commerce Commission calculated the loss to Telecom of providing telephone services to uneconomic customers to be $41.2m.

Telecom says that is too low and is making submissions to the commission.

Vodafone’s share of that is $9.5m. It already had to pay another $18.5m for the 18 months to June 2003.

Vodafone wants to see a competitive tender for who provides the TSO service — a telephone service to almost all households in New Zealand.

Vodafone public policy manager Roger Ellis said the TSO “amounts to directly subsidising the fixed- line operator Telecom to provide a particular level of service”.

Vodafone is urging the Government to back its three-point plan.

The plan calls for the immediate disclosure of the general location of the uneconomic customers.

Only the Commerce Commission and Telecom know the details of that and a few people who sign confidentiality agreements.

It says the Government should start a wide-ranging review of the way the TSO is provided and an in- depth audit of the quality of the services.

Ellis said last year that it had some discussions with the Government on the TSO.

“We will be renewing those discussions this year. There’s more work to be done to developing an alternative system. But we think there is a groundswell of support for change to the TSO.”

Vodafone was talking with other companies about the TSO.

“A number of people have indicated interest in exploring options for reform,” Ellis said.

The Telecom Users’ Association (Tuanz) supports a review. Ihug, Callplus and WorldxChange also support a review and believe the TSO is outdated.

Telecom’s general manager of government relations, Bruce Parkes, said New Zealanders would not want to do away with the basic principle of telephone services to almost all households.

Telecom and the Government had updated the TSO in 2001 and Telecom had committed to invest $100m to meet the service levels of the agreement.

Telecom had delivered on those.

Telecom could not see an appetite from customers for a change to the Kiwi Share, Parkes said.