Telecom scales back on rural developments

8 May 2006

According to Simon Moutter the chief operating officer of Telecom New Zealand, the company’s decision to scale back on investments in broadband in the rural sector was taken prior to an announcement from ICT Minister David Cunliffe, forcing the incumbent to unbundled its local loop. Moutter conceded though that the Commerce Commission’s decision on LLU was a ‘big intervention’ that has made it cut back on new backhaul capacity, particularly in the rural areas or where Telecom has a DSLAM which is nearing capacity. The COO went on to say that Telecom is reducing its investment on new DSLAMS in rural areas and provincial towns as it ‘can’t make a good enough business case to invest.’

Although some have accusedTelecom of throwing its toys from the pram, Moutter stressed that his company had earlier warned of the logical economic consequences of opening up the last mile saying: ‘We were very clear through all of last year, through the commission’s determination process, that if they made some of the decisions they were proposing to, it would impact our investment decisions.’

New Zealand, Spark