Econet responds to challenge
26 May 2006
Econet responds to challenge - proposes independent analysis of Vodafone's returns
In this week's Telecommunications Review, Vodafone once again challenged Econet's assessment of the returns of Vodafone's New Zealand business. Econet is responding to that challenge by proposing independent analysis of Vodafone New Zealand's economic returns - at Econet's expense.
While Vodafone continues to hide behind the NZ$182.2 million net surplus figure recorded for FY 31 March 2005 in its statutory accounts, which only provide skeletal analysis. Econet estimates that Vodafone New Zealand actually produces an annual total return to Vodafone PLC of approximately NZ$1 billion in FY 31 March 2006 - when dividend, interest and total inter-company payments are taken into account.
Vodafone's own Group Chief Executive, Arun Sarin, is already on the record saying 'I think our company here in New Zealand contributes far more than what the ordinary numbers might suggest', "So it is hardly surprising Econet believes Vodafone's returns warrant closer examination," said Tex Edwards, Econet's Chief Project Director.
"New Zealand consumers pay the highest mobile prices in the OECD. What's more, the returns Vodafone has generated thanks to its GSM monopoly are now a matter of critical public interest and public policy importance, especially now they have 66% market share of the market by minutes.
"Econet will pay for resolution of this dispute once and for all. Vodafone needs to open its books for an independent analysis of the economic returns on its New Zealand business," concluded Edwards. "Telecom is forced to communicate its financial structure in detail, so should Vodafone."