By PATRICK GOWER
Telecom would like to hang up on its obligations to rural communities, selling outlying phone networks or leaving services to local companies.
The idea has been floated in Telecom's submission to the Government's telecommunications inquiry.
Telecom suggested putting its uneconomic rural Kiwi Share obligations up to contestable tender and said later that it would even consider selling the network in some areas if it created shareholder value.
Under the agreement Telecom is required to provide free local calls and cannot increase connection fees above the rate of inflation.
Consumer groups last night were worried about the possibility of Telecom's removing itself from serving the rural communities.
David Russell, chief executive of the Consumers' Institute, said Telecom was welcome to investigate other options for rural service, but reminded it that the Kiwi Share obligations would have to remain "sacrosanct."
"They can do what they like provided there is no lessening of the service.
"Indeed, we would go further and say that telecommunications service to rural areas needs to be improved."
The vice-president of Federated Farmers, Tom Lambie, said the organisation was concerned by the possibility of any move to circumvent the Kiwi Share obligations.
"Not only would we like to see the Kiwi Share obligations preserved, we would like to see them improved as well."
Mr Lambie said the telecommunications infrastructure in rural areas was "stuck in the 1990s."
"Farming is a major part of the New Zealand economy and we need to be part of the communications revolution as much as anyone. Instead we have farmers who struggle to get faxes let alone decent fax or cellphone service."
Mr Lambie said Federated Farmers was concerned by the effect Telecom's proposal would have on the rural community.
Ruapehu Mayor Weston Kirton said the idea was another "kick in the guts" for the rural community.
"If it was to go to another private provider all service would be profit motivated and that would no doubt hurt those in isolated areas," he said.
Mr Kirton said it was unlikely another provider could make money from serving rural areas if Telecom could not.
"At least with the network the high costs of serving rural areas can be shared."
AdvertisementAdvertise with NZME.
Latest from New Zealand
After spending $2m on pins for Covid-19 workers, department now cutting costs
Some 80,000 frontline pandemic workers were given the pins.