Telecom NZ (ASX:TEL) has announced it has lost an appeal against its government-mandated obligations to provide telecom services in unprofitable areas.
The company had argued to the High Court that the rates of return specified in the Telecom Service Obligations were below what any reasonable investor could accept for such large-scale infrastructure investments.
But the court found against Telecom, in what is only the latest in a series of attempts by the company to overturn the legislation.
In a separate appeal, Vodafone NZ won its own TSO-related court battle, after arguing that the rates it was charged for two consecutive year were too high.
Under the TSO, Telecom is obliged to provide telecom services even in areas deemed to be unprofitable. The government charges competitors such as Vodafone levies to contribute to the cost of providing these services.