Draining dividends from Telecom can mean you don't get broadband

While I usually do not relish schadenfreude, I did enjoy reading in today's NZ Herald about poor Jenny Gibbs who cannot get broadband in at her leafy home in Paratai Drive. Who is Jenny Gibbs? She is the former wife of Alan Gibbs - a key player in the privatisation of Telecom in 1990.

In an earlier post I explained how the current parlous state of broadband services in New Zealand can be directly attributable to the sale of Telecom to the private sector. It is not often that you see a member of the new right establishment admit they have been negatively affected by the short sighted nature of their own policies. It usually hits everyone else but them.

Why can't I feel sorry for Jenny Barbara Gibbs? Because it is highly likely she (directly or indirectly) benefited from the high levels of dividends paid out to shareholders of Telecom during the 1990s. If Telecom had paid lower dividends in favour of greater investment in infrastructure, Jenny Gibbs would now be more likely to access broadband in Paratai Drive. The shareholders of Telecom asset stripped the company for their own personal benefit. She split from Alan in 1996, and stayed in the house on Paratai Drive.

Alan Gibbs was on the board of Telecom from 1990 and a director until 1999.

Also, according to the Companies Office, Jenny Gibbs has 120,000 shares (held jointly) in TeamTalk Ltd - a company which Telecom bought a 19.9% stake in 2001. In 2003 the company bought back the Telecom shares (probably with debt) and listed itself on the stock exchange with an IPO the following year, gaining a significant premium. Her holiday home has been used for a Telecom ad - one presumes they paid her for the use of the venue.

So while Jenny Gibbs can't get broadband, she has had many opportunities to directly or indirectly financially benefit from Telecom.

That said, I must congratulate Jenny Gibbs for pointing out the glaring inconsistency between Telecom's promotion of 'super fast broadband' and the service the company actually offers most of its customers. Telecom ought to realise that when their greatest ideological supporters are having trouble believing Telecom corporate propoganda, the general public are likely to see Telecom's claims for what they are - outright lies.