WELLINGTON - Regional Development Minister Jim Anderton has ruled out Government subsidies for Telecom to provide rural areas with new technology.
Mr Anderton said the Government would have to seriously consider Telecom's control of the local loop network if the corporation was not prepared to invest in upgrading the network itself.
In its submission to the Government inquiry into the telecommunications industry released on Tuesday, Telecom suggested it was happy to provide voice-quality services to rural areas. However, Internet and online services might require subsidies.
Another option was to sell its rural services or put them out to tender. Rural services were loss-making and subsidies for improved access should be investigated.
Mr Anderton said Telecom was suggesting that rural areas would not receive access to new technology services unless they paid for it themselves.
"Telecom makes $822 million a year from its dominant position in the New Zealand marketplace. These profits come from its monopoly over the local loop," he said.
"It is not clear at all that Telecom is making a loss from its monopoly on rural telephone lines."
The Government has asked that Telecom's monopoly of local phone lines be investigated. One option is to allow other players access to the network.
Telecom spokesman Martin Freeth said the firm provided Internet access to many rural areas, but furnishing the faster, better services available in urban areas was too expensive.
- NZPA
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