Vodafone calls for Kiwi Share inquiry
Posted on: Wednesday, 8 October 2003, 06:00 CDT
Vodafone is calling for an inquiry into Telecom's Kiwi Share, because it is working against the Government's policy of bringing high-speed Internet to the regions.
The Telecommunications Users Association (Tuanz) backs the call, saying the 13-year-old agreement between Telecom and the Government is past its use-by date.
Vodafone commissioned a study into the Kiwi Share by the Institute of Economic Research (IER).
It concluded the Kiwi Share would hinder the development of alternative telecommunications networks in the regions.
The Kiwi Share agreement between Telecom and the Government requires Telecom to provide free local calls, including free dial- up calls to the Internet, to most households.
The telephone line rental may not be higher in rural areas than the standard line rental and the rental may only increase by the rate of inflation.
The Telecommunications Commissioner is charged with working out how many customers are uneconomic for Telecom and sharing the losses among several telecommunications companies in New Zealand, including Vodafone.
Vodafone's public policy manager, Roger Ellis, said yesterday that if Vodafone won new customers from Telecom in the regions, it could increase Telecom's claimed losses in the regions and increase Vodafone's share of paying for the losses.
"That's not the way to promote new investment or competition," Mr Ellis said.
The IER study concluded that high- income households got proportionately more benefit from the Kiwi Share than low-income households because high-income households were big users of dial-up to the Internet which was free.
The study said if no Kiwi Share existed, line rentals were likely to fall for 80 per cent of customers, and rise for 20% where the cost of supplying a line was more than the standard line rental.
Tuanz said other ways existed to subsidise remote customers, and other companies should have the opportunity to supply regions with telephone services, and claim any subsidy region by region.
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