Maori trust in gun over spectrum lobbying

By PETER GRIFFIN

The Government's handling of a $5 million grant to the Maori Charitable Spectrum Trust is heading for parliamentary scrutiny.

Documents suggest that lobbying by the trust led to the inclusion of controversial clauses in the Telecommunications Act.

The trust was given $5 million in 2000 and rights to buy a chunk of third generation (3G) mobile spectrum at a 5 per cent discount.

It invested most of the money in the local arm of Zimbabwe-based mobile operator Econet through its commercial arm, the Hautaki Trust.

Three years on, Econet is losing money and is yet to launch a network.

Documents obtained under the Official Information Act by National's communications and IT spokesman, John Key, show Hautaki Trust chairman Bill Osborne presented some overblown figures to the Government in a bid to win regulatory concessions that would help Econet's business case.

In February 2001, he said Econet's entry into the market would result in $1 billion in direct foreign investment, at least 1000 jobs and cellular rates in line with other OECD countries.

The figures are quoted extensively in Government documents and were presented as a case for introducing provisions into the Telecommunications Act in December 2001.

Documents backing up the claims were not included.

The mandatory roaming and cellsite co-location clauses in the act allow a new entrant in the mobile market to piggy-back on a competitor's network provided it covers 10 per cent of the population with its own network and can present a solid business case.

"Without [mandatory roaming] the arrangement with our partner is likely to fall over and no third operator will come into NZ and Maori will once again be left in the cold," Osborne wrote in an email.

The passing of the provisions shocked the industry, which had taken comfort in a previous Government decision not to include them. Their inclusion was put down to clever lobbying by Econet and Hautaki.

Key said he wanted to know whether the Government's expectations for Hautaki had changed.

"We want to find out whether the Government still considers those targets to hold water and whether, given the size of the investment, they're committed to the same agenda," he said.

Key said he would be asking the Government about its monitoring of Hautaki's progress, given the existence of documents detailing misgivings by Associate Minister of Maori Affairs John Tamihere over the trust's reporting structure.

"We want assurances from the minister that there's a level of accountability and to know where they'll go with future spectrum rights," said Key.

Tamihere's office requested better monitoring of progress at Hautaki in late 2002.

Analysts have always been sceptical of Econet's chances of success.

A glimmer of hope for reviving its commercial plans came last month with news that its parent had struck a joint-venture deal with South African company Altech that will generate capital for Econet.

But Sydney-based telecoms commentator Paul Budde said in his 2003-04 telecoms review that Econet "has made no progress and entry looks unlikely before 2005, if at all".

Despite the odds being stacked heavily against it, the Maori Charitable Spectrum Trust remains confident it will deliver the benefits to Maori it originally envisaged.