Telco shows the way for infrastructure

Telco shows the way for infrastructure

Media Release
29 February 2016

“New Zealand’s rise up the OECD on measures of telecommunications performance is an example of what can be achieved with strong public and private sector cooperation, market competition and cutting edge infrastructure procurement,” says Stephen Selwood.

“A decade ago, New Zealand was the OECD’s telco basket case. Operating a mobile phone was more expensive than just about anywhere else in the developed world and for those who could access broadband downloading at a couple of megs made you the envy of all your friends.

“Today, our broadband speeds are rapidly rising and by some measures in the top few. Our mobile costs have come into line with the rest of the world and performance has improved.

“Only access in rural areas and international connectivity have remained sticking points. However, with the phased expansion of fibre and high speed wireless to rural areas, construction of the Spark-Vodafone Trans-Tasman Cable and the announcement by Alcatel-Lucent and the Bluesky Pacific Group that it will build the 9,700km Moana Cable by 2018, both these issues look to be substantially addressed.

“Telecommunications is the unsung hero of New Zealand infrastructure.

“The keys to New Zealand turning around this poor situation have been public-private cooperation, market reform and good procurement.

“Market reforms to attract and generate competition, such as mobile phone number transferability and the entry of 2Degrees, have driven mobile service delivery exponentially higher.

“Fixed broadband improvements have been driven by deregulation and a world leading public-private partnership.

“The structural separation of Telecom enabled competition at the retail level and provided the platform for a public and private partnership in the core infrastructure.

“Through the first phase of UFB the New Zealand taxpayer is getting a $3-5 billion fibre network for a price no greater than $1.35 billion. If uptake is good, the taxpayer will get it for a much smaller figure.

“The Aussies have been forced to pull back on their equivalent of UFB after initial estimates of A$40 billion ballooned above A$80 billion.

“Less than a decade ago, New Zealanders were repeatedly told we couldn’t have cheap or good quality mobile and broadband. If it wasn’t our geography holding us back, it was our population. If it wasn’t population it was lack of scale.

“What’s happened in the telco sector tells us that these issues can be addressed with fit for purpose delivery models, a bit of Kiwi innovation and some real aspiration.

“If transport performance could rise as fast, water governance reform move as quickly and public and private housing partners work together as effectively, New Zealand would be well on its way to the top of the OECD again - which is where we belong - but this will require a much more ambitious approach than has been adopted to date," Selwood says.

ENDS

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