Peter Nowak: C word covers those who vilify Telecom

Whoever thinks Telecom should be investing more in infrastructure is a communist.

Plain and simple. A Che-Guevara-worshipping, five-year-plan-loving, furry-hat-wearing communist.

Let's face facts - the manner in which this company is run is firmly in line with the principles that made this country, and every other freedom-loving nation on earth for that matter, what it is today.

It wasn't the will of the people that toppled the Soviet Union. Nor is it the will of the people that is changing the face of China today. And it certainly won't be the will of the people that finally brings freedom to Cuba.

Nope. It was - and is and ever will be - all due to that one, greatest ideology of our time: capitalism, proud and mighty.

Companies don't exist to serve you and me. As much as they - especially technology firms - might say otherwise, they don't exist to provide us with "innovative solutions for easier living". They exist for one reason only: to make money. And public companies, such as Telecom, exist only to keep making more and more of it.

Here's how capitalism works. Someone invents a product, then builds it and sells it at a mark-up to make a profit. Demand for the product grows and eventually the inventor needs more resources to build more of it.

The inventor creates a business and sells shares in it, thus raising the needed money and ensuring increased production and sales.

Those who bought those shares obviously want returns for parting with their hard-earned cash, so the inventor is thus under continual pressure to provide such, either by boosting the shares' value or by paying regular bonuses on them.

On the surface, it looks like a system driven by human greed. But that's an over-simplification, because it's pure biology. Like humans, if a company isn't growing and getting bigger and evolving, it's dying.

By that measure, Telecom is alive and well. The company last week reported a $916 million pre-tax profit, up 21.5 per cent from last year.

Moreover, it reported a special dividend of 10c on top of a regular dividend of 10c. That yield is basically double what other companies in the industry are offering. Telecom shareholders must be ecstatic, for this is the capitalist system working at its best.

The company also reported revenue - or how much it rakes in thanks to you and me - of $5.6 billion. Its capital investment - or how much it puts back in to maintain and improve the services used by you and me - was $703 million, or 12.5 per cent of revenue.

Compared to the latest annual reports from other major telecommunications providers around the world, that's very low: Telstra in Australia spent 15 per cent, BT in the Britain spent 16.6 per cent, Verizon in the United States, 18.6 per cent, BCE in Canada, 17.3 per cent and NTT in Japan, 18.5 per cent.

The latest statistics from the International Telecommunications Union (ITU) show that New Zealand is 41st out of 42 in the high-income nations in telecommunications investment. Since there isn't anybody else spending big on that sort of infrastructure here, this is largely Telecom's burden to bear.

Even our Telecommunications Commissioner Douglas Webb says Telecom is investing the bare minimum to keep Government regulators off its back.

But the fact of the matter is this: the ITU, Douglas Webb, Verizon, BT, Telstra and all those other telcos are communists. Capital "C" communists. If it were up to them, we would all be waving little red books, smoking cigars and saluting giant paintings of Stalin.

You see, making money for shareholders is what this land is all about.

It's not about spending money on silly things like improvements to broadband networks so that they operate with any sort of speed or efficiency.

It's also not about strengthening the country's communications backbone so that it is impervious to rats. It's all about making sure that Telecom shareholders - three quarters of which don't live in this country - have an ever-increasing wad of money in their pockets.

Which is the way it should be. It's simple economics. Why should Telecom spend more? Do we spend more than we have to on rent, utilities, or even lunch?

Hell no, most of us spend the bare minimum on the basics whenever possible so that we can pay out luxurious dividends, such as holidays or new cars, to ourselves as much as we can.

Why should we demand anything different of Telecom? We're all good capitalists and let's keep it that way.

Who brought down the Berlin Wall? It sure wasn't BCE. Who walked on the moon? It wasn't Douglas Webb. Who kept South Korea free from Soviet control? Not the ITU. It was Telecom, or at least the ideals it embodies, that did all these things. We should all praise this proud company for defending our way of life.

Can I get three cheers for Telecom? Hip, hip, hooray ...