Selling Telecom not good business sense

Thursday May 15, 2014 Published in Letters to the Editor
Telecommunications Minister Mark Brown. 14032831 Telecommunications Minister Mark Brown. 14032831

Dear Editor, Minister Mark Brown’s explanation on television the other night as to why Government won’t exercise their option to purchase the NZ Telecom Shares of Telecom Cook Islands doesn’t really add up.  

Even cursory observation from the outside makes you wonder why Telecom is even selling their shares for it would seem well below the worth of the capital assets alone. 

A moment’s thinking about the multiple assets they have in Rarotonga and the outer islands and you can easily total up an amount more than the $23 million asking price. The cost of the new O3B itself has to be worth several million dollars. Consideration of this asset value alone makes the selling price an attractive prospect and I am surprised there’s not more industry interest. 

Couple this positive to an average annual net profit of several million dollars and even borrowing 100 per cent against the asset base makes good business sense.

He suggests these profit making utilities should belong to the private sector as this is where they are willing to invest but they are not so in roads, harbours or water supplies etcetera.  If the utility makes good business sense, that is, it makes money then of course the private sector will invest.  Create the same sort of profit making environments for water, energy even sanitation and the private sector will invest. 

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Through this letter I encourage the Minister to use his MBA skills and examine the Telecom balance sheet and he might note that if Government owned 100 per cent of Telecom, Government would own 100 pe rcent of the earnings. Then, after paying off the loan with these earnings, the money Government makes could go back into roads, harbours or water etcetera as, in the end, the profits belong to the property owner who can spend these profits where they like.

Look at it as a property owner of say Tuki’s and Michigan Motors. Why would someone own these properties? Because they make money, plain and simple! I’m sure the owner has no intentions of selling these properties; why?  Because they make money! I’m sure if other similar properties came onto the market this landlord would look at the buying opportunity; why?  Because they could make money!

The Telecom share sale presents Government with the chance to regain a property the CIP Government lost in the mid 1990s after they bankrupted the country.  Here, this current CIP Government is given the chance to correct the sins of their fathers and actually, make the people some money but sadly, it seems, the sins of the fathers are indeed visited upon the sons and good times not the long time CIP will once again squander the opportunity and cost the country.

Editor, I with a lot of other Cook Islanders think this Government has it all wrong and I, with a lot other Cook Islanders, can’t wait until July 9 to correct this mistake.  Let’s hope that July 9 comes in time to save this opportunity from the Finance Minister.

Orders Up

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