Politicians can't help Telecom NZ woes

When a phone network seems to be falling around you, to hear New Zealand's ICT minister say he is "very concerned" might not seem strong enough. But it is.
Written by Darren Greenwood, Contributor on

When a phone network seems to be falling around you, to hear New Zealand's ICT minister say he is "very concerned" might not seem strong enough. But it is.

We might want "action" and let's face it, "action" and "something must be done" does sound exciting, doesn't it? But I feel such soft-sounding words from Steven Joyce were right, even if they may appear weak.

The opposition Labour Party was demanding intervention. And so was Ernie Newman, head of the Telecom Users Association. However, what intervention, was not spelled out too clearly.

What can governments do anyway in such cases? Telecom is a private company after all.

Telecom is doing all it can to solve the XT problem, with supplier Alcatel-Lucent drafting in experts from around the world.

I doubt a government-led "rescue" would look any different, other than having government officials get in the way and politicians grandstanding.

I'll admit, if emergency phone systems are failing, as they did this morning, then, yes, ministers are right to express their concern and threaten regulation. But the last thing we want is a phone network to become some kind of political football.

Like they say, telecommunications are an essential infrastructure but thankfully, these days we have choice. We should thank the former Labour Government of New Zealand for privatising Telecom in the 1980's and opening the market up to competition. Imagine the disaster New Zealand would be facing if Telecom was the only telco and XT the only network?

Fortunately, we also have Vodafone, we also have 2degrees.

The customers, the people, the market can show their "concern"; they can intervene in their own way. And many of them are by switching to other networks. Telecom is getting plenty of punishment and this is also being reflected in its declining share price.

The beauty of the XT phones is that you can simply stick a Vodafone SIM card in and hey presto! It works. Simple really, and people are bleating and whining like there is some great crisis.

Let's imagine if the politicians actually did run the telco. Few politicians, especially Labour ones, have a business background.

ICT Minister Steven Joyce has a background in radio and travel marketing/publishing. The type of communications his Labour opponent Clare Curran is most familiar with is public relations!

I am sure neither of them will be as skilled as Telecom's Dr Paul Reynolds or any of the other bods at Telecom, even those who made the "wrong" decisions and resigned.

Imagine the decision making for a new network in a state-owned or controlled telco. Imagine the other, non-technical influences that might come into play.

Coming from Britain I have seen enough horse-trading over major defence and aircraft contracts where political expediency matters more than what is best technically or offers best value to the taxpayer.

For an example of what can happen when politicians intervene in the market place, all we have to do is ask Australian Prime Minister Kevin Rudd, who is in deep water over the country's insulation program.

Politicians thought they knew better than the marketplace and rushed around doing something for political ends, rather than giving it considered thought. A similar insulation program in New Zealand is also in trouble, but fortunately, no one has died yet.

Thus, when big business might seem to be failing, we need to ask ourselves, can politicians really do any better? It is obvious they cannot, and the best thing they can do is get out of the way, and just say they are "very concerned".

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