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Concern Telecom will force Rural NZ to pay more

Concern that Telecom will force Rural NZ to pay more for access to new technologies

Regional development Minister Jim Anderton is concerned that Telecom wants rural areas to pay to upgrade their telephone lines before it will allow them access to new technologies coming on stream.

"Telecom makes $822 million a year from its dominant position in the New Zealand market place. These profits come from its monopoly over the local loop," Minister of Regional Development Jim Anderton said.

"It is not clear at all that Telecom is making a loss from its monopoly on rural telephone lines. In Wellington where they have limited competition from Saturn they can reduce their line charges by $5 a week and still make a profit.

"Either Telecom is subsidising Wellington telephone subscribers in a bid to beat off competition from Saturn - which is predatory pricing - or they are making the rest of New Zealand pay $5 a month more in line rental changes than they need to - which includes people in rural areas.

"Rural and Provincial New Zealand produces much of New Zealand's exports and should not be seen in isolation from the rest of the country.

"Rural and Provincial New Zealand needs access to modern technologies if new industries are to thrive in the regions.

"If Telecom is not prepared to invest in upgrading New Zealand's phone network then the government needs to seriously consider whether Telecom's control of the local loop is in New Zealand's best interests," Jim Anderton said.

ends

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