FutureFive NZ - Kiwi share may be unfair

Warning: This story was published more than a year ago.

Kiwi share may be unfair

If you’re living in an area in which it is uneconomic to supply you with a telecommunications service, please stand up.
Don’t know who you are?
You’re not alone – neither does anybody else.
Yet millions of dollars are handed over to Telecom every year to supply these unknown people with a telecommunication service.
Meanwhile, rural users suffer from connection speeds that are a third slower than their urban cousins (according to the latest Epitiro report – see opposite page).
It’s all because of a piece of archaic regulation called the Telecommunications Service Obligation, better known as the Kiwi Share.
When the government sold the copper network and Telecom was formed, part of the deal was that all New Zealanders would receive a phone service at a reasonable price regardless of where they lived. In order to compensate Telecom for supplying that service, its competitors have to pay them a sum of money each year.
Last year that amount was $70 million, of which Vodafone paid $18 million. As you might expect, the telco is not happy.
Lobbying successive governments to change the Kiwi Share hasn’t worked because no politician wants to be the Minister who stopped citizens from getting ‘free local calling’. So Vodafone has come up with a new plan.
It’s joined forces with rural provider Farmside, which sells satellite access, and is offering Kiwishare customers a $500 hardware subsidy on the equipment they need to become either a Vodafone mobile customer or, if there is no mobile coverage, to install a satellite dish and become a Farmside customer.
Of course Vodafone and Farmside don’t know who they are; the non-commercial customers don’t know who they are. Telecom won’t tell them and a spokesperson for the Commerce Commission says it works out the Kiwi Share by “geo-coded co-ordinates which identify locations of commercially non-viable customers (CNVCs) as per the Commission’s TSO model.”
If you suspect that you might be a CNVC and you’d like to take advantage of that $500 offer from Vodafone, perhaps you could give the Commission a call.
Who’s the fairest of them all?
Slingshot and Orcon are the country’s top ISPs according to Epitiro, the company the Commerce Commission employs to independently measure broadband performance.

Epitiro measured ISPs’ performance in over 12,000 homes around the country and came to the following conclusions about the top five providers – Orcon, Slingshot, Vodafone, Telecom and TelstraClear:

Orcon is strong in Auckland, where it provides unbundled services (it has put its own equipment into Telecom’s exchanges to serve its customers).

Both Orcon and Slingshot are good performers in most regions.

There is a significant difference between rural and urban performance – download speeds outside of the big five city regions are a third slower than those within them.

Broadband is best in Auckland and Wellington.

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