Telecom boss surprised NZ has 'money to waste'

Paul Reynolds. Photo / Richard Robinson

Telecom's Scottish chief executive, Paul Reynolds, says New Zealand is wasting money on the Government's "fragmented" $1.5 billion fibre-to-the-home broadband plan.

"As a relative newcomer I am surprised New Zealand has so much money to waste," Reynolds said yesterday after Telecom's first-quarter financial results.

Analysts listening to results to September 30 were relaxed with a 4 per cent fall in operating profits and forecasts that it would remain within guidance for the year to June 30.

But Reynolds was peppered with questions about the implications of the Government's regionalised fibre plan and its effect on Telecom's revenue in the future.

Reynolds said nobody knew how the scheme would pan out but the company was looking at options with other players for working within the plan.

As it stood the plan for local fibre companies created problems with duplication of resources and added costs to Telecom.

"When I worked in Scotland and other rural areas, policymakers looked at efficient ways of doing things," said the former head of operations for British Telecom.

"This is not headed in an efficient direction. I am just surprised that we have so much money to waste in New Zealand."

Reynolds said Telecom would be talking to other players such as Vector as it made a submission on the government plans by January.

Telecom said it was disappointed with a Commerce Commission's decision to issue proceedings relating to loyalty offers made by its wholesale business unit.

The commission announced yesterday it had initiated a High Court prosecution for three separate loyalty offers made.

"This is an utterly disproportionate response to an inherently uncertain area," said Tristan Gilbertson, Telecom group general counsel.

- ADDITIONAL REPORTING: NZPA