Joe Hendren

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Saturday, February 03, 2007

Telecom pirate leader resigns

Rod Emmerson's cartoon in this mornings Herald nicely summed up my thoughts on the resignation of Telecom CEO Theresa Gatting. Even TV3 voiced one criticism of Gatting in their coverage the other night - Gatting was too focused on shareholder returns. TV3 didn't make the connection, but "shareholder returns" is a key reason few New Zealanders have decent broadband. Long John Silver would be proud.

It appears some Telecom executives are still shaking in their insecure little new right boots that the Government stepped in and finally did some long overdue regulating.

Quite frankly unbundling the local loop is hardly heavy regulation, particularly if you look at the number of other countries who have also introduced the policy (and most did so many years ago).

If the local right wing loonies and the board of Telecom are going to overreact to a moderate policy like unbundling, then perhaps we should have gone the whole hong and renationalised the local loop instead. My point is, and I think this is a worthwhile lesson for the left - the reaction would have been the same.

Christopher Niesche also calls on Telecom to stop being a company obsessed with holding back the tide of regulation at any cost and become a company seeking growth

I hope Telecom appoint a CEO who takes a longer term view of Telecom's position in the market and realises the company will be far better off to invest in itself through greater investment in infrastructure. This would involve stop giving into the demands of the short term speculators for their blood sucking dividends and putting more emphasis on the interests of their customers, staff and real investors (ie the long term shareholders).

That said it will take some time for New Zealanders to forget the number of times Spot the dog shitted inside our house. I hope Telecom improve their behaviour, but unfortunately I can't help but think they will be a naughty puppy for some time yet.

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At 5:33 PM, Anonymous Byron said...

No surprises when they won the "supreme ass award"

At 6:19 PM, Anonymous terence said...

Hi Joe,

Good post. I would add that Telecom's problem seems pretty inherent to the way large businesses are financed: share holders and markets focus to a significant extent on short term profit, not long term business development. And certainly not (at least when they have a cosy quasi monopoly) on customer needs.

At 9:47 AM, Blogger Joe Hendren said...

thanks terrance

largely I agree, however I do see Telecom as an extreme case in the New Zealand context. Rod Deane unfortunately had a lot of influence over the new right reforms of the 1980s and since has had strong influence over telecom. I see the Telecom fraccus as an application of the new right economic model to business, a model I see just as unsustainable and full of unrealistic assumptions as it was when it was applied to public policy.

Telecom now is a strong argument against privatising natural monopolies.

At 2:10 PM, Anonymous OIiver said...

Prices for calls dropped a lot after privitisation. Anyway, you may have noticed that broadband got slower after unbundling and plenty swings on which sites you're checking out.

As for the new right, where would rather live post rogernomics NZ or today's France with youth unemployment on 25% and banliues.


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