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2nd Mar 2016

Smart Investment In Southern Phone

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In 2002, local councils in New South Wales were approached with an offer. Newly-formed telecommunications company, Southern Phone, was asking for a simple $2 investment. Backed by the federal government’s Networking the Nation scheme, the company was established to sell telecommunication services to regional areas at a competitive rate and, importantly, to allow local municipalities to funnel profits back into their communities.

41 councils signed on as equal shareholders, becoming the sole owners of the company. More than a decade on, these councils are reaping financial rewards.

Bland Shire Council signed up and the partnership has proved immensely valuable for the small area of about 6000 people. “I don’t think anyone had hugely high expectations,” said Community Relations Officer Craig Sutton of the investment, “but the results have been outstanding.” Last year the Shire took home a dividend payment of $29,852. Dividends vary across councils; 20 percent comes from an equitably split pool, 80 percent pertains to the number of Southern Phone customers within the local government area. Some council areas have received as much as $480,000 in a year.

Two years ago Southern Phone also introduced an annual grant scheme, offering $25,000 to each shareholder council for community projects.

Mr Sutton said in a time when finances are tough, the grant Bland Shire received alleviated financial pressure and supported small but important projects that would have struggled to receive funding otherwise. Until recently, the chance for additional councils to buy-in to Southern Phone has not been possible, but due to uncertainty over council amalgamations in NSW, this could potentially change.

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