Govt announces local yokel telco tender

The Federal Government has announced a tender for telcos to carry out a $150 million upgrade to telecommunications services in rural areas.

According to a Government statement issued this morning, carriers will be asked to detail their call-charging strategies, which will directly affect the 37,000 Australians living in "extended zones" of Australia.

The Government proposed that "pastoral" call rates of 25 cents for 4.5 minutes be replaced by a charge of 25 cents for 12 minutes.

Rural rates for television and internet access will also be examined, the Government said.

"A number of carriers" had already expressed interest in "competing with Telstra for the right to deliver untimed local calls in remote areas".

In a separate statement, the Government announced a proposal to up Telstra's compensation for complying with the universal service obligation (USO) by $30 million. Telstra is currently the only company operating under the USO.

Totalling $280 million, the compensation will act "as a safety net" for possible losses that Telstra will sustain because of the competition the Government proposes to introduce into the USO.

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