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Home / Business

Fibre companies hit by $50m broadband tax

Chris Keall
By Chris Keall
Technology Editor/Senior Business Writer·NZ Herald·
24 Oct, 2019 04:47 AM3 mins to read

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Image / 123rf

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UFB companies Enable and Ultrafast Fibre are both set to take a larger financial thumping from the Commerce Commission as fibre uptake grows.

READ MORE:
• Broadband arms race: UFF offers 10x faster fibre
• UFB company Enable books maiden profit

The watchdog has just released its draft list of which companies it should pay what share of the annual Telecommunications Development Levy - a $50 million-a-year tax on the telco industry, which is used to part-fund the government's share of public-private fibre rollouts, plus services for the hearing impaired and emergency calling.

Any broadband provider with qualifying revenue above $10m is liable to pay a share of the levy, based on its market share.

For the 2019 financial year, Spark ($17.4m), Vodafone ($12.8m), Chorus ($10.9m), and 2degrees ($4.3) are, as usual, up for the lion's share of the tab.

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Christchurch UFB provider Enable's share of the more than doubles to $663,904 while central North Island provider Ultrafast Fibre share increased from $624,023 to $814,879.

Trustpower, which has built up a broadband base of around 100,000 customers by bundling internet with power also has a notable bump - from $195,716 to $342,683.

The Telecommunications Development Levy was established by the then National-led government in 2011, and initially set at $50m for three years before dropping to $10m.

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However, mid-decade it was extended at $50m through to this year (it will finally drop to $10m from 2020), leading one telco insider to complain to media that then Communications Minister Amy Adams was making promises about extending rural broadband "using other people's money".

Voyager and MyRepublic both make their second appearance on the list, both nearly static.

Discover more

Business

Broadband arms race: UFF offers 10x faster fibre

12 Dec 04:35 AM
Telecommunications

5G: The UFB fibre killer?

10 Dec 05:02 AM
Business

UFB company books maiden profit

23 Oct 04:00 PM
Telecommunications

Vodafone first with 5G mobile - cops ready drone

09 Dec 07:30 PM

Reannz is no longer liable following a High Court decision that it operates a private, not public, telecommunications network.

The Crown-owned agency runs a broadband network for universities and research institutes. It recently hit controversy when funding cuts by the outgoing National-led government led Reannz to raise its rates - and three universities (Victoria, Canterbury and Lincoln) rebelled and said they would turn to private-sector internet service providers.

Earlier this week, Christchurch Council-owned Enable said it made an $11 million net profit for the year to June, against its $4m loss for 2018.

Revenue increased 23 per cent to $59m as the number of customers on Enable's fibre network increased by 22,000 to 101,000 - or just over half of those within reach (fibre has been rolled past 198,000 homes and businesses).

The network operator says it expects to make $13m on $69m next year - which means its set to pay a larger share of the levy next year.

Source / Commerce Commission
Source / Commerce Commission
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