Vodafone, NZ Comms in social media stoush

The spirit of the internet beats the spirit of PR

It's all the rage for business to embrace social media, but Vodafone and challenger NZ Communications don't appear to be on each other's friends lists if exchanges on the TUANZ blog this month are any indicator.

The two have gone toe to toe on a range of controversial, including the Castalia report, jointly sponsored by Telecom, Vodafone and TelstraClear, on co-location of cellsites and on mobile termination rates.

On the Castalia report, Vodafone spokesman Paul Brislen said the idea behind the was to "stimulate an actual discussion about this, given the lack of concrete analysis to date".

"Everyone says 'build it and they will come' but in the current economic environment I'd think that's a risky proposition. On top of that the dollar amount we're talking about is probably closer to $6b than to $1.5b and if we're to spend that sort of money, I'd like to see some debate about what we spend it on.

"If it was me, I'd be looking at a Southern Cross Cable equivalent first. That we could do for $1.5bn and start making a difference (and a return) from word go. Duplicating existing infrastructure with something that's faster but will cost customers more doesn't seem like a good idea to me."

NZ Communications Tex Edwards later chimed in praising TUANZ' slamming of the report.

"This report is constructive for NZ because it proves the case for ongoing regulation. When Telecom’s lawyers are calling for a review of the ComCom, this report illustrates the need for ongoing regulatory vigilance

"The report reminded me it took NZ 10 years to figure out a workable cell site co-location system from when co-location was first mentioned in the 1999 Fletcher Ministerial Report to the time the STD was activated in Jan 2009 — lets hope the next stage of the industry development doesn’t take as long."

To which Brislen replied that he thought Edwards was "confusing his dates again".

"You came to us for a co-location deal in 2006 asking for around 30 sites and we said 'yes' immediately to most of them and then... you didn't take it any further. How is that taking '10 years to figure out a workable cell site co-location system'? As I understand it, we've offered you over 100 sites to co-locate and you haven't taken us up on the offer. The ball's in your court, Tex."

When Vodafone announced it was going to roll out its 3G network nearly a year ahead of schedule, Edwards wrote that he couldn't reconcile the $3 billion investment number mentioned in the press release with Vodafone NZ's accounts.

"Our review of the accounts suggest most of the investment mentioned has been removed by dividends, capital transfers and intercompany loans, the investment number on the balance sheet shows a shareholders equity investment of only NZ$114m plus a loan from Vodafone PLC of $811m. The accounts record fixed assets of only net NZ$719m.

"Where has the $3b gone? Can you assist us in reconciling the investment please."

Brislen came back with a breakdown: Easy, $1.5b to buy BellSouth, $500m on the 900MHz network rollout, $50m on unbundling Auckland plus of course there's the expansion of the 2G and 3G networks (2100MHz) which equates to quite a bit more. Are you saying we shouldn't ever pay a dividend to our shareholders? Is that how NZ Comms runs? I do seem to recall asking you many years ago where you'd spent your $4m of public money and you threatened to sue me. I still don't have an answer. Cheers, Paul."

And then there was the mobile termination rates exchange from early in the month. when Brislen quoted OECD figures, TUANZ CEO Ernie Newman asked if he was "related to the Paul Brislen who a while ago on this very blog described OECD figures as "notoriously unreliable?"

"Now a namesake is quoting them as the ultimate authority. My, it just shows how organiosations can lift their game! But let's not get divereted here — the issue is not the ranking. The issue is that worldwide, mobile termination rates have become a giant slush fund for mobile service providers at the cost of the general public. Regulators globally are clamping down. Our Commerce Commission is absolutely right to do the same."

"I don't recall saying the OECD was 'notoriously unreliable'," Brislen replied, "but then my memory is also quite hopeless these days so I can't stake a claim to it. Citation needed! where did I spout such heresy? I have trouble with the Commerce Commission's interpretation of the OECD but as for the OECD itself... I'm not sure. Shall we bet a lunch on it?"

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