Minister clarifies Telecom dividend statement

17 May 2006 Media Statement

Minister clarifies Telecom dividend statement

Communications Minister David Cunliffe was approached by the news agency Bloomberg for an interview for a feature article on the telecommunications stocktake process which he understood would be made publicly available to a wide audience.

When the article was published on Tuesday 16 May, some of his comments were taken out of context, with the agency using only a small part of a much broader discussion he had with the reporter.

"In the interview, I was asked a wide range of questions on public and industry reaction to the recent broadband policy announcements. The subject matter was not new but previously released in the telecommunications stocktake cabinet paper."

Mr Cunliffe had no information about Telecom's future dividend policy when he gave the interview.

"As Telecom has said, it has not given me any indications of future dividend policy."

The minister was reported by Bloomberg news agency as saying Telecom's investment levels had not been high relative, for example, to its dividend flow, and that greater competition and increased investment "may mean on the part of shareholders that they need to accept that in the short run there may be somewhat lower dividend flows or lower returns''.
The minister also stated clearly, as reported, that dividend policy was for the board of Telecom to decide.

"My comments were based on information publicly available, including information in the cabinet paper I released on 3 May. They were not and should not be taken as being connected to any future policy decisions.

"All the key government policy decisions have either been taken and made public or signalled along with the time frames in the cabinet paper. "

ENDS