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Chorus hit with 13% telco levy cut

27 Jun 2013

The Commerce Commission has today released its determination of the amounts 26 telecommunications providers will pay towards the $50 million Telecommunications Development Levy (TDL) for 2011/12.

During this period, the Commission has determined that Chorus will pay 12.80% of the levy, while Telecom will pay just over half.

The government uses the annual levy to pay for telecommunications infrastructure including the relay service for the deaf and hearing-impaired, broadband for rural areas, and improvements to the 111 emergency service.

Telecommunications Commissioner Dr Stephen Gale says the levy - about 1% of revenue - is paid by companies, or groups of companies, earning more than $10 million per year from operating a component of a public telecommunications network (fixed or wireless).

The Commission’s liability allocation determination sets out what proportion of the $50 million levy each of these ‘qualifying liable persons’ should pay in proportion to their qualified revenue.

Gale did admit however that the Commission had considered Chorus’ concerns about its ability to recover the costs of the TDL, but noted the setting of wholesale prices was outside the TDL process.

“The Commission has consulted extensively with industry to ensure that our approach to the TDL is practical, fair and consistent across telecommunications providers," he said.

Gale added that the Commission had received and considered four submissions to its draft determination from Kordia, Telecom, Vodafone and Chorus, before reaching its decision.

But overall, submitters had expressed broad support for the Commission’s process.

“The Commission will follow a similar approach in setting future TDLs," Gale said.

"A consistent approach year on year will reduce future compliance costs for telecommunications providers."

Established by legislation in June 2011, the levy is set at $50 million a year until 2016, at which time it will be reduced to $10 million.

To read a copy of the determination click here

The contributions for the 2011/12 year:

  • Telecom New Zealand Ltd 50.75%
  • Vodafone 21.95%
  • Chorus 12.80%
  • Vodafone Fixed Line 7.79%
  • Two Degrees Mobile 2.32%
  • Orcon 0.67%
  • Teamtalk 0.59%
  • Vector Communications 0.51%
  • FX Networks 0.50%
  • Call Plus 0.45%
  • Bay City Communications 0.26%
  • WorldxChange Communications 0.26%
  • Snap 0.22%
  • Kordia 0.17%
  • Compass Communications 0.17%
  • Woosh Wireless 0.14%
  • Trustpower (Kinect) 0.11%
  • Railway St Industries 0.10%
  • Transpower 0.09%
  • Research & Education Advanced Network New Zealand 0.05%