A One News investigation has found an off-shoot of Telecom New Zealand tried to offer the Cook Islands' government a secret cash deal to secure its monopoly there.
The current contract in the Cooks ends in June, so Telecom NZ, which owns 60% of Telecom Cook Islands, drafted a deal for the government to sign a one off $4 million dividend on condition that Telecom NZ would keep its monopoly.
Following the investigation Telecom NZ has admitted the deal was circulated at top level without board approval. It says the offer was a draft document, which had not been reviewed or agreed to by the Telecom Cook Islands board.
The offer was never signed and the Cook Islands government has launched an inquiry into the performance of Telecom Cook Islands.
Telecom Cook Islands makes $8 million profit a year from only 12,000 users and there is concern about pricing.
"It is a lot of money when you consider a population of 14-15,000," says Cook Islands Prime Minister Jim Marurai.
The possibility of a cheaper provider is also being investigated.
Telecom NZ says the Cooks government has every right to review its position.
"Everybody hates a monopoly... it doesn't matter where it is whether it's in NZ, people hate them... so we have to deal with that," says Stuart Davies from Telecom Cook Islands.
For now all deals are on hold.
