Wednesday, 28 March 2007

Telecom: privatise the profit , socialise the risk ?

My apologies. I have three major posts in the stack - or at least major to me: first, a piece exploring web 2.0, what it means to me, and how I believe we might be using the tools as a social and public good: second, AK07- especially around the fun and games of Turbulence: third, some thoughts on the next stage of TVNZ Ondemand.

These, however, are waiting for some time, the most precious commodity in my life, to say something useful, and hopefully, interesting.

Right now though, all this can wait while I interject to express my stone cold astonishment at the report in the NZ Herald yesterday on what Telecom might be planning to do with their windfall profit on The Yellow Pages sale .

"Telecom shareholders are in line for a billion dollar windfall from the company after the $2.24 billion sale of its Yellow Pages directories business to a private equity consortium"

This golden [to the Telecom shareholders] shower is followed by a quote from a telecom analyst which also reckons Telecom is considering using $400 million to purchase Powertel, the Australaian network company, and another A300 million ($347 million) to retain its 19.9 per cent stake in Hutchison Telecommunication Australia's 3G business.

I'm not sure if the first $400 is Australian or kiwi - but the bottom line is that about $2 billion NZ [say it slow] is being used for shareholder return, and to fund an expansion plan to Australia.

Just what is going on here? If these figures are correct then Telecom seems to be saying - upgrade the New Zealand network - sorry - nope - upgrading the DSL infrastructure - forget it - sorting out the backhaul bottlenecks? Not interested!

Privatise the profit - socialise the risk.
In short a perfect working example of my title [acknowledgement to David Cunliffe, NZ Minister of Communication , from whom I first heard it] - privatise the profit - socialise the risk.

Sorry -but unless someone can tell me what I am missing here - I think this is a scandal.
End of story!