Telecommunications Act: Commission sets final TSO cost
The Commerce Commission has today announced its calculation of Telecom New Zealand's net cost of complying with its
telecommunication service obligations (TSO) for the period from 20 December 2001 to 30 June 2002.
The net cost is $34.72 million for the part year period, or $65.67million annualised. This cost is $7.78 million lower
on an annual basis than the Commission's initial calculation of $73.45 million announced in June.
Telecommunications Commissioner Douglas Webb said the Commission received detailed submissions on its draft
determination, which had resulted in its recalculation of the final cost.
"The Commission has used a higher cost of capital relating to the TSO business in the final decision," said Mr Webb.
"Though the increased return on capital allowed to Telecom would have increased the net cost, this change was more than
offset by the adoption of a wireless technology cap on the costs of remote customers, who were previously serviced by
fibre-optic systems, and by other adjustments in the calculation process."
The net cost of the TSO is shared between Telecom and other network operators providing retail services during the
period covered by the calculation.
Those operators are TelstraClear Limited, WorldxChange Communications Limited, Vodafone New Zealand Limited, CallPlus
Limited, Compass Communications Limited, Teamtalk Limited, The Internet Group Limited (ihug) and Global One
Communications (recently merged with Equant New Zealand Limited). The apportionment of the cost between Telecom and
network operators is based on proportionate shares of telecommunications revenues as shown in the following table:
REPORTED CARRIER LIABLE REVENUES
For period 20 December 2001 - 30 June 2002 Liable % of TSO Charge Revenue total
($) ($)
Telecom 1,206,884,000 75.89% 26,352,406
Vodafone 301,232,000 18.94% 6,577,424
TelstraClear 74,879,000 4.71% 1,634,989
CallPlus 3,280,739 0.21% 71,635
WorldxChange 2,616,603 0.16% 57,134
Teamtalk 879,514 0.06% 19,204
Ihug 334,988 0.02% 7,314
Compass 184,559 0.01% 4,030
Equant 0 0.00% 0
Total 1,590,291,403 100.00% 34,724,137
A copy of the Commission's final determination is available on the website, www.comcom.govt.nz, select
Telecommunications Regulation.
Note: The Commission has commenced the process of determining the net cost to Telecom of meeting its TSO obligations for
the 2002/2003 financial year.