CallPlus trims its phone bill

By PAUL BRISLEN

Telecommunications company CallPlus has found a way to cut its share of the bill for providing free local calls.

The Commerce Commission yesterday released its draft ruling on the cost of the so-called Telecommunications Service Obligation for the year to June 30, 2003, and put the figure at $62.6 million. Telecom will send eight of its rivals a bill, based on their net revenues for that period.

However, CallPlus has told the Telecommunications Commissioner that as of February 2003 it was no longer liable as it had ceased selling services directly to end users. The commission's report says: "From that date, [CallPlus] says that retail services were provided by CallPlus Services Limited, which is not a parent, subsidiary or sister company of CallPlus Limited and does not have an interconnection agreement with Telecom".

The commission notes that if this is the case, CallPlus would indeed cease to be a "liable person" as defined in the Telecommunications Act, but it has asked CallPlus to clarify its position.

Both CallPlus and CallPlus Services are co-owned by Malcolm Dick and Annette Presley.

Dick has been an outspoken opponent of the TSO, calling it a "tax on competition".

Telecom's competitors are required to pay it to maintain its TSO obligations to those customers who are deemed to be "non-commercially viable". Those customers live in remote places and are said to cost more than they generate in revenue.

In August Dick said: "It's like the Government telling Virgin Blue it can operate in New Zealand but it has to pay Air New Zealand for every customer it takes off them. It's insane". Dick and Presley are overseas and not available for comment.

One industry insider, who did not wish to be named, applauded the move by CallPlus.

"That's very clever. That's exactly the sort of behaviour you'd expect with this kind of intervention."

Vodafone is the big loser in the TSO payment, having to pay close to $13 million to Telecom. Vodafone missed the deadline to challenge its TSO payment last year. The company's public policy manager, Roger Ellis, does not rule out another legal challenge, but he is heartened by the commission's approach this year.

"The commission has said it will be looking at the way costs are portioned out and we're certainly going to be making strong submissions over that issue." Ellis said the Communications Minister Paul Swain had also expressed concern that a company like Vodafone, which has network coverage that could be offered to non-viable customers, is forced to fund Telecom's network in those areas.

"We would offer service in those areas if it were contestable and we had cell sites available, but it would depend in large part on whether we would be further penalised for driving up Telecom's costs by taking customers off them," said Ellis.

The commission is receiving submissions until the end of July and a conference will be held on the issue in August.