Govt broadband plans smothering industry, says TeamTalk boss

CityLink doesn't expect answer on UFB before Christmas, CEO says at annual meeting

A shareholder at this week’s annual general meeting of TeamTalk sought assurances that the current dividend of 20 cents a share – unchanged from the previous year – would be maintained in the future. That wasn’t easy for directors to give.

The major reason is the changing landscape of telecommunications.

“UFB and RBI are like a blanket that has smothered the whole industry,” says managing director David Ware. “No one expected it [a decision] to take so long.”

TeamTalk division CityLink is short-listed, along with Telecom, for the Wellington region.

Ware was limited in what he could say because “I am tied up in non-disclosures”.

He says should the company win the business, it will partner with Fulton Hogan to wire every street from Wellington to Upper Hutt and Porirua over a 10-year period.

“The intersection of radio and wireless is where our opportunities lie, but we have to get UFB out of the way first.”

He predicts TeamTalk’s mobile radio business will continue to decline, but its fixed and wireless broadband divisions will thrive because of the move toward mobile devices and data-intensive applications.

At the meeting it was revealed that the company's mobile radio revenue dropped $1.1million to $18 million for the year to June.

Broadband revenue from CityLink and wireless operator Araneo was $12.7 million.

He anticipates a similar financial performance in the current financial year. “Looking forward, it will be pretty much the same. Mobile radio showed a modest decline, but I don’t see a great deal of change.”

Ware wasn’t expecting a decision on UFB before Christmas. “I expect it will be the New Year before we find out how it plays out.

“Outside daily activity, UFB is consuming most of our time.”

TeamTalk would compete against Telecom if it lost the Wellington bid in the UFB process.

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