Telecom's CEO expressed on TV3 last night that her company spends $750,000,000.00 on capx each year.
That is $187.50 for every New Zealander in the country per year.
In my house that's $375 .00 pa. We spend $~1,800 on telecommunications annually at present. So TG's saying she'd be putting 20% of our expenditure back into capx if we were spending our money with her company.
TG then went on to draw our attention to the fact that her competitors are proposing spending a mere $5 per person (that's 2.6% of her current annual capx per person - for those who are having trouble keeping up with the math here :)
Experience in AU shows that it takes time but there are now a large number of major players offering broadband speeds that are ten times faster than the average Telecom offering. It shouldn't take a fraction of the time to deliver the same in NZ because the technology was very new when they started in AU.
The point is that Telecom's competitors will deliver a far more satisfactory broadband experience in NZ by only spending 2.6% per person of what Telecom are currently spending on capx.
What exactly is TG spending this money on and is she getting value for her shareholder money which is, as she pointed out last night on TV3, mainly New Zealanders’ money.
Is Telecom anything more than a money go round?
Did someone in government wake up earlier in the week and decide this is in fact the case and that it's time to change it?
John Campbell pointed out that NZ is 21 out of 30 in the OECD for broadband.
TG pointed out in response that NZ is 22 out of 30 in the OECD for GDP.
Is $5 per person really all it's going to take to launch us (Kiwis) from 21 to something higher? (The answer to that is a resounding YES - TG told us in a round about way her self!)
Will our GDP rating follow our BB access rating in the OECD?
Has the government hailed an end to the Telecom money go round? Another 7.1% off the share price so far today seems to suggest that the stock market think so.
If 1.3 cents per person per day is all that it's going to take Telecoms competitors to kick start our broadband experience then why are we 21 out of 30?
Cheers Don