Bulk of $50m levy to fall on big four telcos

The $50 million cost of providing telecommunications services such as the 111 system should mostly be picked up by the big four telcos, says the Commerce Commission.

The 16 biggest telcos each pay towards the Telecommunications Development Levy for 2016/17, and the commission’s draft decision says Spark, Vodafone, Chorus and 2degrees Mobile should collectively pay more than 90 per cent of the $50m.

Should the draft decision be passed, Spark would pay 35.4 per cent ($ 17.4m), Vodafone 26 per cent ($13.2m), Chorus 22.6 per cent ($11.3m) and 2degrees 8.4 per cent ($4.2m).

The only other company to pay more than 1 per cent would be Slingshot-owner Vocus, which would pay 3.2 per cent ($1.6m).

The levy, about 1 per cent of telecommunications services revenue, is paid by providers earning more than $10m a year from operating a telecommunications network.

The levy was established in 2011 to pay for telecommunications infra- structure and services that are not commercially viable, including the relay service for the deaf and hearingimpaired, broadband for rural areas, and improvements to the 111 service.

The commission is inviting submissions on its draft and expects to release its final decision in December.

Spark said the draft decision was not unexpected as it was based annually on a revenue-share formula that the commission used to determine how the cost was calculated.

“It’s worth remembering that ultimately, the levy is paid by consumers through higher prices.”

A Chorus spokesman said the firm accepted the decision, which was largely in line with what it expected.

Vodafone said the levy had an important role in helping fund some of the more economically challenging, community- focused telecommunications initiatives. It did not have anything further to add regarding the decision process underway.

A 2degrees spokeswoman said the company’s increasing contribution to the levy was a reflection of its growing market position.

Matthew Theunissen