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Telecommunications Act 2001

Telecommunications service obligations - TSO charges payable by the Crown - Annual procedure for determining TSO charges payable by the Crown

94EB: Considerations for determining net revenue

You could also call this:

"How to work out the net revenue from telecommunications services fairly"

Illustration for Telecommunications Act 2001

When you calculate net revenue, you must think about a reasonable return on the money invested in providing telecommunications services. You need to consider the purpose set out in section 18 when calculating net revenue for a draft or final TSO cost calculation determination. The Commission decides what to include in the calculation. When you calculate net revenue for a draft or final TSO cost calculation determination, the Commission may choose not to include profits from new services that need a lot of money to set up. The Commission must not include losses from services that the TSO provider does not have to provide. You must comply with the Commission's requirements when calculating net revenue. The terms "established telecommunications services" and "new telecommunications services" have the same meanings as in section 94E. You can find more information about these terms in that section. The Commission uses these terms to make decisions about net revenue.

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94EA: Calculations of net revenue and auditor's report must be given to Commission, or

"Telecommunications companies must report their income and have it checked by an auditor to ensure accuracy."

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94F: Commission to prepare draft TSO cost calculation determination, or

"The Commission must prepare a plan to work out costs for special services each year and let the public know about it."

Part 3Telecommunications service obligations
TSO charges payable by the Crown: Annual procedure for determining TSO charges payable by the Crown

94EBConsiderations for determining net revenue

  1. In calculating net revenue under section 94EA and calculating net revenue for the purposes of a draft TSO cost calculation determination under section 94F and a final TSO cost calculation determination under section 94J, the provision of a reasonable return on the incremental capital employed in providing telecommunications services to end-users must be taken into account.

  2. In calculating the net revenue for the purposes of a draft TSO cost calculation determination under section 94F and a final TSO cost calculation determination under section 94J, the Commission—

  3. may choose not to include profits from any new telecommunications services that involve significant capital investment and that offer capabilities not available from established telecommunications services; and
    1. must not include any losses from telecommunications services other than services that the TSO instrument requires the TSO provider to provide; and
      1. must consider the purpose set out in section 18.

        1. In calculating net revenue under section 94EA, the TSO provider must comply with any requirements of the Commission relating to the application of subsection (2)(a) to (c).

        2. In this section, established telecommunications services and new telecommunications services have the same meanings as in section 94E.

        Notes
        • Section 94EB: inserted, on (being the date of separation day, and an Order in Council (SR 2011/302) having been made under section 36), by section 55 of the Telecommunications (TSO, Broadband, and Other Matters) Amendment Act 2011 (2011 No 27).