The Postmaster-General (Mr Fawcett) declared that he would issue no more licences unless the licensees agreed to sell telephones to the Post Office.
All limitations of areas were removed and licensees were allowed to open public call offices but not to receive or deliver written messages, and they were allowed to erect trunk wires.
The new licences were to terminate in 1911 without any provision for purchase or compensation in that year, but with the option to the government to purchase the plant of the licensees in 1890, 1897, or 1904 at a price to be determined by arbitration.
The licence of the National Telephone Company was extended so as to be co-extensive with that of a competitive licence for any locality on condition that the company should afford intercommunication with the telephone systems of the new licensees.
Extremely well suited for sheep-farming, the natural pastures of the country were quickly parcelled out into huge pastoral crown leases, held by prosperous licensees, the squatters, who in many cases aspired to become a country gentry by turning their leases into freeholds.