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Summary:

The telecom bubble of 1990s had far reaching effects, and on of the companies affected deeply was New Zealand Telecom, which saw its shares plunge, and profits evaporate. Instead of licking its wounds and hiding under the rock, the company decided to cut its fat, and […]

The telecom bubble of 1990s had far reaching effects, and on of the companies affected deeply was New Zealand Telecom, which saw its shares plunge, and profits evaporate. Instead of licking its wounds and hiding under the rock, the company decided to cut its fat, and bet big on an all IP network, which makes it one of the handful of incumbents to ditch the aging PSTN infrastructure in favor of IP. The total cost of this network upgrade – $1 billion. A lot less than what British Telecom is spending on its 21Cn Network, but still a sizable sum of money. “Yes, there is a degree of risk about it. But some things are obvious – there’ll be something in the marriage of entertainment and communications, for example,” says one
NZ Telecom executive. Their objective: mass personalize the phone network by offering services that fit consumer lifestyles and not what the phone company wants them to buy. Enlightened telecom executives … yeah there are some of them around in the far corners of the world.

By Om Malik

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  1. Om, My time in Telecom NZ when they were first restructuring (80’s)and my observations while living for years in NZ and even more recently find the linked to article hard to swallow. Telecom’s monopoly in NZ is so strong that the consumers never benefit. The charges are outrageous and the “connectivity” that NZ needs sorely lags behind. Basically the greed of foreign investors drives something that is not for the benefit or economic advancement of New Zealand. Selling off the communications assets is not necessarily the best road forward. The same core has followed NZ’s economics status backwards for n years. A few profited, and few of those are still in New Zealand. Telecom NZ is political and controlled by overseas interests. It’s a travesty to believe that they will do something “great” to launch NZ forward. I read between the lines.. that they are worried about their revenue… and thus need to find new ways to gouge the consumer.

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  2. Stuart, given that I have never lived in New Zealand, I would defer to your experience. I liked what they said in the story, hence the recap. anyway you should get some of your friends to get us the latest skinny from NZ?

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  3. I agree with Stuart – I’ve lived in New Zealand for the past 13 years, and compared to the rest of the developed world, the ‘broadband’ here is atrocious, mainly because of Telecom’s monopoly. You can either go for faster transfer rates with a (rather low) monthly bandwidth cap, or slower transfers with no cap. If you want both, you’ve got to be very, very rich. =(

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