Telecom New Zealand (ASX:TEL) and Vodafone have announced that they have settled a long-running legal dispute over service obligation payments.
Telecom NZ said it had reached a full and final settlement over the battle over Vodafone's payments to it under the Telecommunications Service Obligation (TSO) scheme.
The TSO was the compensation Telecom NZ received to provide services in unprofitable rural areas. It is now being phased out, after Telecom NZ and Vodafone submitted a winning joint bid to improve connectivity in rural NZ under a government broadband initiative.
Settling has brought an end to around four years of litigation covering six years of determinations under the TSO regime.
Announcing the settlement, Telecom NZ CEO group general counsel Tristan Gilbertson said the end of the TSO regime and the joint rollout agreement had motivated the settlement.
“Time has moved on, and against this backdrop we've agreed it is time to put the disputes of the past behind us so we can focus on the future,” he said.
The terms of the settlement are confidential. TEL shares grew 0.94% in Tuesday's trading to $2.150.
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