Tuanz slams “self-serving” telco report
A consumer advocate says Telecom, TelstraClear and Vodafone show lots of self-interest, and little vision, with their joint report that rejects any need for the government to spend $1.5 billion on fibre-to-the-home.
Telecommunications Users Association of NZ (Tuanz) chief executive Ernie Newman (pictured) says the task of building infrastructure should not be left to the three telcos, as their report, jointly-commissioned report from Castalia suggests.
“They will ration technology and bandwidth to stretch out the life of yesterday’s investments and maximise their own returns," says Mr Newman, whose organisation represents more than 500 telco customers in the corporate space.
"They should not be criticised for this – they have a responsibility to put the interests of their shareholders ahead of New Zealand’s national interest, especially as they are all predominantly owned by overseas interests.”
To compensate for the telcos’ self-serving approach, which Mr Newman sees as misaligned with New Zealand’s national economic interest, the government needs to push ahead with its $1.5 billion fibre plan regardless, says the Tuanz boss, noting it was “a key plank of the 2008 election”.
“By setting the objective of getting fibre to 75% of New Zealand homes [the government] is taking the right step, as this ensures that the technological base for all future advances is in place and accessible to all providers thus ensuring a genuine competitive market.”
Conversely, Mr Newman says “Proponents of the Castalia Report fail to see that New Zealand needs to get this technology all over the country, at the same time or ahead of the countries with whom we are competing for skilled people, trade, and the retention of our brightest young people.
“This is a backward-looking, negative, self serving report. It reflects no understanding how communications technology can transform New Zealand’s future. It hoses down the sense of opportunity.
“The government is on the right track. Absolutely nothing should change as a result of this report,” says Mr Newman.
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Comments and questions13
Totally agree Ernie.
The lack of vision and attempted introduction of confusion shown by these three Telco's can only reinforce InternetNZ's Network Strategies approach of the power company utility expansion model.
Hopefully Steven Joyce will show the leadership needed to let the power companies start leveraging their infrastructure and capabilities in ways the Telcos and ISPs simply refuse.
Lies those ISP are all monopolist. Telstra has held Ausie back for years. And Telecom has held us back economically since it was sold. Vodafone is horrible too. All they care about is their employer. Their CEO's work for their shareholders and just make them money while we pay 1st rate price for 4th rate products. They lie Tuanz is right. Telecom data cap, price fixing profiteering scum.
This report is so obviously a protectionist strategy from the three main telcos. If we leave it to the telcos, we will be stuck with outdated infrastructure and third rate service. The NZ Government needs to invest in broadband, not let this profit-hungry cartel hold the country back.
TUANZ is scarcely "a consumer advocate": it's the advocate for all those little nook-and-cranny telecommunications fly-by-nighters who think the world owes them a living. Like $1.5bn in fibre. "Backward-looking, negative, self serving" is a better description of TUANZ than of the subject of its criticism.
take $1.5 billion
triple it to account for the rest of the needed investment
depreciate it over 10 years
take the depreciation and spread it over 1 million homes
result = $450
This is the ADDITIONAL ANNUAL FEE that would need to be charged to every home in NZ to put this white elephant in place. This does not account for the cost of borrowing the money, nor the cost of maintenance, and definitely doesn't include any profit or overhead contribution, it leaves an EBIT of ZERO.
Now. Given that the report, researched by an independent policy advisory group, states that New Zealanders don't think they should pay ANYTHING for the type of services this investment would allow them to receive, how can Ernie, or anyone else who doesn't want to cherry-pick their customers from the top level of contribution to ARPU, justify such an investment? It is as clumsy and ill-thought-out as the similar proposal in Australia.
A piece of work was done about 10 years ago to quantify the cost of FTTP. The numbers that that report came up around $5Bn based on a number of varaibles (teledensity, rollout cost, geography).
Admittedly the cost to implement fibre as a technology has dropped (though conversely the price of compliance and civil works has likely increased in real terms), but it does plainly show a wide variant in industry vs. Govt. calculation.
As Observer has noted, the important element to note here is that Kiwis want these services for nothing. Free lunches may work for politics but not for business.
Anonomous - there is nothing anonomous about us! TUANZ is in fact a non profit organisation with close to 500 members of whom the majority are a who's who of the customers of the major telecommunications carriers - banks, airlines, retail chains, councils, education and health organisations, agricultural interests, libraries, etc. There are some IT companies among them, but our membership is very diverse and absolutely not open to capture by anyone. Check www.tuanz.org.nz for more details.
Three cheers for TUANZ! "Don't worry - leave it to us" say the incumbents - Ernie's assessment of what will happen is absolutely spot on. "Anonymous" sounds like a Telecom stooge to me.
I pay $80/month and I sure as hell won't pay any more than that. Which begs the question, which customer IS going to pay more?
If we have a wishlist to spend the $1.5bn on I'd put a second trans-Tasman cable at the top of my list. Stop the monopolistic bastards in their tracks.
I have asked this specific question a number of times. 3 times from Ernie Newman. Once from Steven Joyce.
All I get is generalities. Better education, Health, working from home. . . .
Not specific like. I will be able to video Conference into or out of classrooms. Be able to log onto my business network from home. Be able to transmit high definition images of a mole (etc) for a skin specialist to analyse.
Well. I can do all of the above now so they cannot be the reason for taking $1.5Billion out of taxpayers pockets in terms of increased charges for broadband.
Please Ernie, Steve. Tell me exactly what I will get over Fibre that I cannot get over my ADSL2+ connection running at 14Mbps from exchange to home.
Oh yes. The 4th simultaneous high definition tv channel. I have two eyes and each of them can multitask. (joking)
Please tell me exactly what I will get. Not generalities as I would expect from a 12 year old at school. Remember. You are talking about $1.5 Billion.
Well done Anothermouse you remind of that Pommie movie and attitude "I'm all right Jack!"
After years of trying to make some money from supplying content for web sites finally it's happened. Alas this requires fast internet access and to obtain this I have to drive an hour each way into Auckland's CBD to achieve it. Very productive huh!
I'm sure there are hundreds maybe even thousands of Kiwis in the same boat. And several thousands who don't even go down that road because getting fast internet access is just too difficult.
Thanks anothermouse for being so supportive of us less fortunate individuals
Yeah right - power companies in NZ are known for their investment in new infra-structure, preventive maintenance programs and commitment to competition and low pricing models.
I agree with Ernie it is a self serving paper but nothing more would be expected from commercial entities and I would lump our Electrical Utilities into that. They all have to dance to the Shareholders tune what else could be expected. This investment is for the economic and social good of NZers. Read the Digital Britian report it is only the first release but is a challenging report. This $1.5b needs to be spent wisely but we also need to leverage all the existing NGN's and then get Education, Government (local and central) and Busienss to collaborate to get the right results. I commend the Commerce Commission for starting the ball rolling. Who will be the equivalent of the Broadbad Stakeholders Group in NZ to keep the momentum going?
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