Telecom is a trade barrier

Rather amusingly, the US Foreign Trade Barriers document referred to below also has some tasty things to say about Telecomms in NZ:

 U.S. industry has expressed concern about the fees charged for completing calls using mobile networks in New Zealand, which are among the highest in the world.

That’s a clear statement that Telecom’s under-investment and over-pricing has had a destructive effect on New Zealand’s competitiveness. It doesn’t say much for Vodafone either.

The piece seems to have been written prior to this year, and

The United States will continue to monitor … developments. 

So the US Government is telling us that market forces have failed to provide competitive mobile phone rates, and indeed, their response to the legislation splitting Telecom into three and mandating naked DSL is unequivocal:

The United States commends New Zealand for taking positive actions towards enhancing the competitive environment, which may lead to increased opportunities for U.S. service providers and equipment manufacturers in New Zealand’s market.

So you folk who believe that our “out of control loony left wing government” should have let market forces decide Telecom’s fate cannot even count the conservative led USA among your supporters. Indeed the USA was the original monopoly buster in Telecommunications when it broke up AT&T.*

The situation in NZ was simple – the market failed and the Government had to step in. Telecom could have avoided the ensuing action if they had been more responsible to all of their stakeholders, including customers, society and Government, not just shareholders.

*Of course in recent years AT&T has essentially got back together and is bigger than ever.

Published by Lance Wiggs


One reply on “Telecom is a trade barrier”

  1. …the market failed and the Government had to step in…

    No, the market didn’t fail. The perception of failed is because the government had enacted legislation (RMA) that scares some Telecommunication vendors which made them hesitate in the past to invest at all in order to compete with Telecom. Also some had taken the view that the government could interfere in their private businesses anytime they want, so for that reason it discourages those businesses from coming in.


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