Telecom to lose monopoly in April

Press, 17 June 1988, Page 1

Telecom to lose monopoly in April

By

BRENDON BURNS,

political reporter

International companies may soon be competing for telephone subscribers in- New Zealand. In announcing the deregulation of telecommunications from April 1 next year, the Minister for State-Owned Enterprises, Mr Prebble, said there was strong foreign interest in investing in New Zealand. Telecom will lose its monopoly providing telephone services as a result of yesterday’s announcement. But Mr Prebble held out a future of cheaper services for domestic customers, even for those in rural areas. People in remoter areas stood to gain a great deal because Telecom planned to reduce toll call charges, he said. The prospect of charges for local calls was not entirely dismissed by Mr Prebble. A trial is planned near Wellington to assess such a system. Mr Prebble also said the question of privatising Telecom was some distance from being considered. He would be opposed to any such move at present. The main import of his announcement centred on deregulation of telecommunications from April 1. New Zealand companies would

form joint ventures with international telecommunications firms to compete, he said. “That is definitely to the advantage of New Zealand.” Mr Prebble said foreign interests had told him that deregulating the telecommunications industry would mean New Zealand could lead the world in technology. Telecom would gain from competition, Mr Prebble predicted, as companies offering

specialist services would still use the Telecom network. It would also retain the lion’s share of the market, he said. Telecom has promised to act fairly in providing access to its network Jto competing companies. Mr Prebble said any complaints could be dealt with by the Commerce Commission, which had “a lot of teeth.” - The timetable for deregulation by April 1 was tight, but achievable, said Telecom’s managing director, Dr Peter Troughton. In preparation for the onset of full competition, Telecom was now undergoing significant restructuring. This included establishing wholly owned subsidiary companies. The two South Island companies included one centred on Christchurch, Blenheim and Timaru. The other was based on Nelson, West Coast, Dunedin and Invercargill. The Telecom restructuring has led to plans for business calls to be subject to a charge of about 2c a minute, starting from July next year. The Opposition spokesman on Telecom, Mr Roger Maxwell (Taranaki), said yesterday that this opened the door for charges being imposed on domestic calls. He pledged that a future National Government would not charge for local domestic calls.