Wednesday, August 03, 2011

New Zealand - Telecom NZ and Vodafone have settled a multitude of disputes between them

[nbr] Telecom and Vodafone this morning revealed they have settled three Supreme Court cases and two High Court cases out of court, plus two disputes before the Commerce Commission.

All related to Vodafone payments to Telecom under the (now being phased out) Telecommunications Service Obligation (TSO) regime, which saw Telecom compensated for providing service to “commercially non-viable” rural customers.

Terms of the settlement were not disclosed.

Vodafone contented its payments to Telecom – which ranged from $15 million to $20 million a year – were too high.

"We've had seven years of this. It's time to move on," Vodafone GM of corporate affairs Tom Chignell told NBR.

There's also another good reason to move on.

The two companies won a joint bid for the government’s $300 million, six-year Rural Broadband Initiative (RBI), which is replacing the TSO.

"Times marched on and the world's changed around us," Telecom spokesman Mark Watts told NBR.

"It's time to move on given what we're doing together [with the RBI)."

The three Supreme Court cases settled out of court cover Vodafone TSO payments to Telecom for the years 2003/2002, 2004/2005 and 2005/2006.

The two High Court cases settled cover the years 2006/2007 and 2007/2008.

TSO disputes in front of the Commerce Commission for the years 2008/2009 and 2009/2010 have also been settled.

Vodafone contended that the Commerce Commission, which brokered the TSO, incorrectly calculated payments. But although the Commerce Commission calculated payments, the TSO regime saw Vodafone to make annual TSO payments directly to Telecom – leading to the head-to-head legal action.

Telecom, Vodafone settle multimillion High Court, Supreme Court TSO cases

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