Telecom says the Government's rural broadband plans will cost
it up to $56 million a year in earnings between 2011 and
2013.
The Government said today that proposals for the roll-out of
high speed broadband in rural areas had been signed off and
it was expected work would get under way on infrastructure
from early next year.
In a brief announcement to the stock exchange, Telecom said
that if the plans were enacted in the current form, Telecom's
ebitda (earnings before interest, tax, depreciation and
amortisation) guidance for each of the 2011, 2012 and 2013
financial years would be adversely impacted by up to $56m.
Communications and Information Technology Minister Steven
Joyce said under the plan, 97 percent of rural households
would get access to broadband services of at least 5Mbps, and
the remainder would have speeds of at least 1Mbps.
"For many remote and not-so-remote rural areas this will be
light years ahead of where they are today," he said.
The Government has also finalised plans involving reform of
the Telecommunications Service Obligations (TSO), involving
compensation to Telecom for supplying local telephone
services in commercially non-viable areas. No increase in
line rental charges was expected.
Telecom shares were down 1c to 220 in late morning trading.
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