Spark remains the largest contributor to the Telecommunications Development Levy. This year the company will pay $3.4 million. That is considerably less than last year’s $17.4 million.
The levy is a tax on telecommunications companies to help pay for public good projects that might not otherwise be funded.
Companies making more than $10 million a year pay a share of the total based on their share of ‘industry qualified revenue’. This includes internet, mobile and data services.
For almost a decade the TDL raised $50 million each year. The bulk of the money was used to pay for improvements to rural and semi-rural telecommunications networks. It also pays for services for deaf people and the 111 emergency services.
This year the fund is reduced to $10 million. As New Zealand’s largest telco, Spark will once more pay the largest contribution. The draft levy allocation estimates this at around $3.4 million.
As you’d expect, the four biggest telcos: Spark, Vodafone, Chorus and 2degrees pay the most. Together their contribution makes up around 90 percent of the total.
One interesting byproduct of the levy process is that it shows the telcos relative performance. There’s little movement year-on-year, but over time patterns emerge.
This year Spark accounts for a shade under 34 percent of the total. Last year it was a shade under 35 percent. In 2014 Spark’s share was 48 percent. Vodafone’s share has drifted up by 0.7 percent in the last year to 26.4 percent. In 2014 it was at 27.6 percent.
Chorus is steady at a shade over 21 percent of the total. Likewise 2degrees is a roughly the same level as last year. Yet at 8.7 percent it has moved up from 5.9 percent in 2014.