Why Sky TV is suddenly New Zealand's eighth largest telco

Why Sky TV is suddenly New Zealand's eighth largest telco

Draft determination of telecommunications levy gives a different view of the industry.

Credit: Supplied

Pay TV platform Sky TV just became New Zealand's eighth largest provider of telecommunications services, at least according to the Commerce Commission.

The commission today released its latest draft determination for the Telecommunications Development Levy (TDL), which can also act a proxy for market share in the delivery of core telecommunications services. As you would expect, the list is dominated by the big four: Spark, Vodafone, Chorus and 2degrees.

But Sky TV has now joined the telco crew due to a legislative change and an unfavourable High Court judgment last month that ruled the company did indeed provide telecommunications services. According to the draft determination, it should pay $83,257 of the $10.1 million levy total. 

The TDL is an annual levy that the Government uses to pay for improvements to New Zealand’s telecommunications infrastructure, including the relay service for the deaf and hearing-impaired, broadband for rural areas, and improvements to the 111 emergency service.

The court case hung on the question of whether, after legislative changes in 2018, communications on a telco network had to be two-way. The judgment confirmed that, with the exception of free-to-air broadcasters and satellite providers operating outside New Zealand, local businesses involved in broadcasting transmission, such as Sky TV, could be liable to pay the levy.

Kordia's share of the levy, a draft amount of $77,136, also increased as a result of the judgement.

New Zealand's largest telecommunications companies are conglomerates, sometimes operating businesses and earning revenues well beyond the provision of core network services. The TDL can cut through some that and provide a glimpse of where each stands in the provision of core telecommunications.

Spark leads the pack with nearly a third of the draft levy to pay, $3.3 million. Vodafone follows with a levy of $2.6 million, then Chorus with $2 million and 2degrees with $961,601. Collectively, these four pay 88 per cent of the levy. Vocus fills out the top five with a draft levy of $301,543.

Overall, ComCom's draft determination identified qualified telco revenue in New Zealand totaling $4.4 billion of which Spark's share was $1.4 billion and Vodafone NZ's $1.1 billion. Chorus was third with $879.3 million.

According to the draft, three other companies joined the list of levy payers: Devoli, Inspire Net, and Todd Corporation, which owns energy and broadband provider Nova. 

Sky TV launched fibre broadband services in March.

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Tags VodafoneTelecommunicationsVocus2degreesChorusSky TVspark



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