Telecom's TSO obligations assessed lower

The Commerce Commission assessed Telecom's final telecommunications service obligations (TSO) in 2002/3 at $56.78 million -- $8.89m lower than a year earlier.

The commission assesses the cost of Telecom's obligation to provide a service to all New Zealand homes, no matter whether it is economic or not. Telecom then offsets that cost to other telecommunications companies according to their market share in the telecommunications market.

The final assessment was $5.86m less than the cost announced in the commission's draft determination in June 2004.

Several factors affected the cost, the commission said.

"An additional operating cost factor pushed the cost up but this was more than counteracted by the addition of a second tier to the wireless cap, that applies a cheaper wireless technology to cost some areas, and a decrease in the weighted average cost of capital," it said.

The commission found that 65,679 residential customers were commercially non-viable; 3010 fewer than for the previous period.

The table below shows how the assessment was arrived at for period July 1, 2002 - June 30, 2003: Company Liable Revenue($) per cent of total Implied TSO Charge($)

Telecom 2360m 72.84 41.35m
Vodafone 688m 21.23 12.05m
TelstraClear 173m 5.33 3.03m
WorldxChange 6.54 0.20 114,535
CallPlus 4.40 0.14 77,067
Compass 4.77 0.15 83,539
Ihug 2.85 0.09 49,910
Teamtalk 0.9 0.03 15,716
Total 3240 m 100.00 56.77m

- NZPA