Telecom chief executive Paul Reynolds says his industry has gone from being the "darlings" to the "dogs" of the technology world as risks turn investors away.
At a telecommunications summit in Auckland yesterday he said new investment was drying up worldwide.
"Our industry finds attracting capital increasingly difficult. You'd be better putting it in the bank, you'd be better putting it in agriculture, because the returns [in telecommunications] are difficult to come by."
Reynolds, presenting at Tel.Con 11 alongside the chief executives of his key competitors, Vodafone, 2degrees and TelstraClear, said private funders needed the certainty of a return on investment as the telco seeks to be involved in the Government's ultra-fast broadband scheme.
"Telecom New Zealand's share price is probably the cheapest in the world [of its type] because the perceived risk of the rules changing, of no return being earnable on investment," he said.
The ultra-fast internet network hopes to offer browsing and download speeds of 100 megabits per second to 75 per cent of the country over the next 10 years. This is over 20 times faster than average household internet speeds.
The network will be co-owned by Crown Fibre Holdings and the winner of Government broadband contracts, which Telecom is bidding for.
Telecom is in priority negotiations to partner with the Crown to lay fibre cables in 25 urban centres.
Reynolds was resolute in his call that shareholders needed certainty that wholesale prices would provide a reasonable return.
"We cannot enter into an engagement where the Government would put in $1.5 billion and Telecom would put in $5 to $6 billion without a reasonable risk assessment that we could gain some sort of return on that investment, no one [at this conference] would seek to do anything different, not with sums of that magnitude," he said.
In its aim to offer investor certainty, the Government has written a 10-year "regulatory holiday" into the legislation paving the way for the broadband build.
This would see the Commerce Commission being unable to recommend regulation on prices or competition until the end of 2019.
The Government faced sharp industry criticism of this model last month at a select committee considering the law.
Yesterday, Vodafone's chief executive Russell Stanners spoke out against the regulatory holiday and believed the commission should have oversight of the fibre scheme.
"Why don't we figure out a way where the regulators are involved?" he asked.
He said the holiday did little to offer investor certainty as it could be changed by future governments.
Stanners wanted a round-table style discussion where the industry could come up with a solution to industry problems with the telco legislation.
TelstraClear chief executive Allan Freeth also criticised the regulatory holiday and other changes enacted in the telco law.
Freeth said the legislation would destroy TelstraClear's existing investment in New Zealand telecommunications and kill competition.
"I contend that it will take consumers back to the days of less choice, limited price protection, and the consequences, intended or unintended, of a monopoly infrastructure."