Spark, Vodafone, Chorus, 2degrees to pick up most of $50m levy

Spark, Vodafone, Chorus and 2degress are in line to pay some 90 per cent of the $50 million government levy for non-commercially viable teclo services like 111 calls. Photo / 123RF

The $50 million cost of providing telecommunications services such as the 111 system should mostly be picked up by the big four telcos, the Commerce Commission said today.

The country's 16 biggest telcos each pay towards the Telecommunications Development Levy for 2016/2017, and the commission's draft decision says Spark, Vodafone, Chorus, and 2degrees Mobile should collectively pay more than 90 per cent of the $50m.

Should the draft decision be passed, Spark would pay 35.4 per cent or $17.4m, Vodafone 26 per cent or $13.2m, Chorus 22.6 per cent or $11.3m and 2degrees 8.4 per cent or $4.2m.

The only other company to pay more than 1 per cent would be Slingshot-owner Vocus, which would pay 3.2 per cent or $1.6m.

The levy, about 1 per cent of telecommunications services revenue, is paid by providers earning more than $10 million a year from operating a telecommunications network.

The levy was established in 2011 to pay for telecommunications infrastructure and services that are not commercially viable, including the relay service for the deaf and hearing-impaired, broadband for rural areas, and improvements to the 111 emergency service.

The commission is inviting submissions on its draft and expects to release its final decision in December.

Spark said in a statement that the draft decision was not unexpected as it was based annually on a revenue-share formula that the commission uses to determine how the cost is calculated.

"It's worth remembering that ultimately, the levy is paid by consumers through higher prices."

A Chorus spokesman said the company accepted the decision, which was largely in line with what it had expected.

Vodafone said in a statement the TDL had an important role to play in helping fund some of the more economically-challenging, community-focused telecommunications initiatives. It did not have anything further to add regarding the decision process currently underway.

A 2degrees spokeswoman said the company's increasing contribution to the TDL was a reflection of its growing market position.