New Zealand faces commercial ‘suicide’

Telcos should forget dividends and invest in growth, says minister

Microsoft appears to be adding to the impetus for New Zealand to increase uptake of broadband, with a discreet word in communications minister David Cunliffe’s ear.

“Microsoft has been in to me and put me on notice as minister that action needs to be taken on broadband,” Cunliffe told Computerworld at a meeting before the Digital Cities and Regional Networks conference in Wellington. The company has an eye to the local viability of its “Live” plan to provide software as a service and efficient infrastructure is critical to this trend, he says.

Increasingly online industry and commerce and a rising generation expecting fast information service will provide a pincer movement awakening the rest of New Zealand’s population to the potential of broadband, Cunliffe says. The move towards online provision of applications services is just one more element in the growing case for higher bandwidth.

Microsoft declines to comment “at present” on any conversation it may have had with Cunliffe on the subject of communications infrastructure.

Gerrit Bahlmann, treasurer of the Next Generation Internet consortium, points to the emergence of Google Earth as an example of broadband value for the general population. Visiting another city, he was able to pull up aerial views and choose a hotel based on its proximity to the places he planned to visit, he says. “Imagine how much more valuable that would be in real time.”

Pressed on the ordinary Kiwi’s recognition of a need for broadband service, Cunliffe cited the potential for telework and avoidance of traffic congestion in large cities. There are pleasant locations in New Zealand which knowledge workers and creative people would love to have as a base, as long as they could conduct national and international business through a high-capacity link, he says. “Name me a country that stands to benefit more from the abolition of distance.”

However, neither Cunliffe nor former Wellington mayor Fran Wilde will venture a view on why the Close2:Kapiti trial, aimed at encouraging people living in the Kapiti area to avoid the commute into Wellington, met with such a disappointing response that it was not followed up.

Teleworking does raise objections on organisational grounds, from managers concerned that teleworkers are outside immediate supervision, says Wilde, but these difficulties “are only in the managers’ minds”. If teleworkers did not produce their quota of work, this would soon be noticed, she says.

Promoting attitudinal changes of that sort alongside development of the infrastructure “is what the Digital Strategy’s all about”, says Cunliffe.

Not to have fast, affordable, ubiquitous broadband in the 21st century is commercial “suicide”, he told the conference in a keynote address. He also agreed with a speaker from the floor, John Heard, one of the founders of CityLink, that New Zealand telcos are risk-averse with investment and prefer to pay large dividends to their shareholders. “You’re right,” Cunliffe says. “They should forget about dividends and invest in growth.”

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