The cause is less clear cut here than in the US. I wrote about the “perfect storm” -- the internet stock, crash, the Q4 2000 economic slide and the telecomms capacity glut – blamed for the US’s hard times in this column six weeks ago (Retail therapy the answer to stormy seas). Terrorism and war haven’t helped matters.
Here, though, none of those causes is so apparent. TelstraSaturn-Clear job losses might be traced back to telecomms overcapacity, but not in this market. There was never any secret about the fact that British Telecom wanted to be rid of Clear, with speculation swirling about for months that a deal had been done long before one actually was. When it was, TelstraSaturn got a bargain (it paid $430 million), according to Australasian telecomms market watcher Paul Budde. And he attributes that to the trouble BT was experiencing elsewhere in the world, what he calls the “2000/2001 telco crisis”.
Budde was writing about the TelstraSaturn-Clear deal is his latest New Zealand market report, which is packed with facts and figures, analysis, predictions and larded with a good measure of opinion. For example, Clear, by his analysis, should be feeling liberated under new ownership, having suffered under BT’s “inept” network investment strategy which was “haphazard at best”. Budde might come across as wildly opinionated, but he maintains he’s never had to back away from any of his apparent barbs.
In the course of promoting his new piece of research, Budde talked about New Zealand broadband internet uptake. He acknowledges progress is being made extending broadband services around the country through community-based efforts, but reckons what’s lacking is a national plan. He even volunteered to help facilitate the drafting of one. A key point, he believes, is that electronically delivered government services could represent about a third of the demand telcos say they require before they will build broadband infrastructure in far flung parts of the country.
I think this is a point worth drawing greater attention to, for a variety of reasons. The government has said that if the economy nose dives in response to recession in the US and elsewhere, it would consider investing money in infrastructure projects.
Traditionally, that means repairing and building roads. Why should it not also mean rolling out that virtual road, the so-called information superhighway?
At a time when potentially hundreds of workers with telecomms expertise are about to find themselves unemployed, what better response is there than to undertake a major public broadband network project? The telcos could hardly complain, having always resisted the “build it and they’ll come” argument. When a Ministry of Economic development spokesman suggested as much at conference in the middle of the year, Telecom’s head of government and industry relations said the notion “sent shivers down the spine” of the company’s finance head.
The government, then, has an opportunity to put our money where its MED spokesman’s mouth is. Spending on telecomms might not go down well with those calling for more public spending on education and health, but those sectors could get tangible benefits from creation of a national broadband network. Computerworld has been writing for years about the potential for remote delivery of educational and health services. But progress in adopting such technology has only inched ahead, hampered by slow networks. Here’s an opportunity to speed things up.
Finance minister Michael Cullen told his party’s annual conferenc in Auckland at the start of the month that “the message we have to convey is that New Zealand needs strong leadership in this challenging environment”. If it’s good enough for the US government, that paragon of strong economic and political leadership, to patch up its tattered economy with hundreds of billions of dollars, New Zealand might do the same. Let’s spend a couple of hundred million on broadband internet.