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Govt criticised for stance on Telecom

Wednesday April 02, 2014 Written by Published in Technology
Opposition Leader Wilkie Rasmussen. Opposition Leader Wilkie Rasmussen.

The Government will almost certainly be waiving its right to buy Telecom New Zealand’s majority stake in Telecom Cook Islands.  

That stance has drawn strong criticism from the Opposition Party, which believes Telecom should be returned to local ownership rather than moving into the “aggressive” hands of Digicel.
Telecom NZ (TNZ) announced on Monday that it has entered into an agreement to sell its 60 per cent stake in Telecom Cook Islands (TCI) to Digicel for about $23 million.
The agreement is subject to a number of conditions – which have not been disclosed - and is expected to complete by May 31.
Telecommunications Minister Mark Brown said TNZ is required to give the Government first right of refusal on the shares, which he expects to happen in the next few days.
“At this stage there’s nothing that would compel the Government to change its mind and spend $23 million, not that we have got $23 million lying around. I think Digicel are far better placed to run and operate our telecommunications company here than the Government.”
Democratic Party leader Wilkie Rasmussen said the Government - a 40 per cent shareholder in TCI - should definitely be matching Digicel’s offer and buying the shares.
“It’s inherent on the Government to do so. That’s why that provision was written into the agreement in the first place.”
He acknowledged that $23 million is a lot of money but said the Government has freely borrowed for other projects, such as the Avatiu Wharf development.
The Government should look at going into partnership with a local consortium to buy the shares in Telecom, he said.  
“I’m sure there might a group of people here with enough finances and buying power. I think it’s time it comes home to the Cook Islands now.”
Rasmussen said he believes Digicel, which operates in 32 markets worldwide, will be less concerned about serving Cook Islanders than Telecom is.
“It’s quite an aggressive company. I think Digicel will be looking to cut down on Telecom’s social responsibility, like its service in the outer islands. Better the devil you know than the devil you don’t.”
He said he also fears Digicel will trim down Telecom’s workforce, meaning locals end up losing their jobs.

1 comment

  • Comment Link Rick Sunday, 27 April 2014 17:10 posted by Rick

    Go for it buy all if you can!

    Can I buy some?


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