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Investment will be the judge of unbundling

Media release
4 May 2006

Investment will be the judge of unbundling

Future investment levels - sufficient to bring good broadband to all parts of New Zealand - will show whether it was right to unbundle, says Business NZ Chief Executive Phil O’Reilly.

“Those arguing for unbundling have said it’s needed to get better broadband to more customers and to improve New Zealand’s growth rankings.

“But those outcomes will occur only if there is significant investment by telecommunications companies.

“Heavy handed regulation like that announced yesterday is more likely to deter than increase investment - common sense tells us that companies fearing they may be regulated are more likely to lobby and less likely to invest.

“This decision also has the potential to inhibit investment in other areas of infrastructure. This example of delays, disputes and disregard for property rights will not be lost on would-be investors in other sectors.

“Business NZ will keep a watching brief on investment in the telecommunications sector over the next few years.

“We have been wary of this kind of government intervention because of our view that it would discourage investment. I hope we will be proved wrong.

“Investment levels sufficient to get better broadband to more people, whether they’re in a major city or a rural area, will be the judge of whether it was right to unbundle.”

ENDS

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