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Telco levy hike for 2degrees

NZN 18/12/2016 Paul McBeth

Mobile operator 2degrees must pay a bigger share of the annual levy that funds non-viable telecommunications services as the country's third-placed mobile operator continues to lift its market share.

The Auckland-based company will pay $3.6 million, or 7.3 per cent of the Telecommunication Development Levy, for the 2015/16 year, up from $2.9 million, or 5.9 per cent a year earlier.

It was the biggest mover this year, easing the burden of the biggest three contributors: Spark New Zealand, Vodafone New Zealand and Chorus.

The levy was introduced in 2011 as part of the enabling legislation to carve Chorus out of Telecom, now known as Spark, and goes towards a contestable fund that helps pay for projects such as the rural broadband initiative and mobile black spot fund.

It replaced Telecom's telecommunications service obligation, formerly known as the Kiwi Share, which was used to pay for telecommunications infrastructure where it isn't immediately profitable to do so, such as in rural areas.

Toronto-listed 2degrees posted a 43 per cent increase in annual revenue to $569m in calendar 2015, generating earnings before interest, tax, depreciation and amortisation of $78.5m.

Spark remains the biggest contributor, paying $18.9m, or 38 per cent, Vodafone's levy shrank to $13.1m, or 26 per cent, while the contribution from Chorus was largely unchanged $11.1m, or 22 per cent.

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