Telecom asks for break on rural broadband pricing

Telecom, which is fighting to win a chunk of government funding to build a national broadband network, has asked for a break on its regulatory burden over the delivery of rural internet.

Communications Minister Steven Joyce is seeking submissions on whether the country's biggest phone company should be allowed to charge more for services delivered by the government's rural broadband initiative (RBU) than the subsidised deal for schools and hospitals.

Telecom wants to ensure any fibre services that are technically the same or similar to what it would be required to offer under the RBI wouldn't have to be offered on the same terms as those subsidised by the government.

The government's rural plan aims to give 80 per cent of rural households internet speeds at least 5 megabits a second, with the remainder getting 1 Mbps.

The government will put in some $50 million of funding towards the build, with the remainder coming through a contestable levy on telecommunication service providers that's replacing the old agreement with Telecom to provide phone services to remote places.

Community hubs, schools and hospitals are expected to get fibre enabling broadband speeds of at least 100 mbps.

Telecom and mobile phone rival Vodafone New Zealand are negotiating with the Ministry of Economic Development in a joint bid to win the right to deliver high-speed internet services over what would be a combination of mobile broadband, fixed wireless and enhanced copper services.

Joyce is asking for submissions on the variation request until April 5.

Shares in Telecom rose 1.8 per cent to $2.02 in trading today, and have dropped 9.5 per cent this year.