Rants, Raves, Reviews


'Sanctions' for underinvesting

By Gary R, in , posted: 26-Jun-2007 10:26

Interesting article and comments from Mr Cunliffe on this mornings edition of the Herald with possible sanctions for Telecommunications companies who under invest in regional and rural infrastructure.

The obvious question is will any 'possible sanctions' also apply to government owned Kordia who (it could be argued) is now what could be considered a full service telecommunications company.

Over the past few years there has been a huge increase in the transformation of land to dairy farming much at the behest of Fonterra who are essentially the NZ Dairy Board. With promises or record payouts and attractive income more and more NZ'ers are giving up the urban life and moving to the country. Moving is a lifestyle choice taken up voluntarily and the more people setting up farms the greater the strain on all infrastructure and services. Is it then fair to require through legislation that public companies invest in what is often loss making telecommunications to service farmers?

Without a doubt and I do not deny that farmers need broadband as well to run their businesses but at what cost? Fonterra has a revenue of approximately NZ$10b per year and over the last few years they have spent literally billions investing in businesses overseas. This revenue makes Fonterra bigger than Telecom and Vodafone combined. Additionally as NZ'ers Fonterra do not cut us any slack on the price of milk with a litre set to rise up to 18cents due to 'record' international prices. Ironic really when it is cheaper to ship fresh milk to Wellington than what it is to ship powdered milk to Shanghai.

Personally, I think that Fonterra need to stump up and invest in infrastructure rather than just 'milking' our country side for all its worth.








Other related posts:
The Butler and Butler 5 Point Plan
National to invest in broadband
We Blew our cap again






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Gary R
Wellington
New Zealand


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