Vodafone: dirty tricks change state policy on mobile phones

By Nick Stride

Friday 30th November 2001

MURIEL NEWMAN: Damaging allegations

Vodafone New Zealand is crying foul over a dirty-tricks campaign that appears to have convinced the government to execute a telecommunications policy u-turn.

The mobile carrier has complained to Parliament's speaker, Jonathan Hunt, and to commerce select committee chairman David Cunliffe about "untrue, misleading, and seriously damaging" allegations made in secret to the committee by Hautaki Trust and its commercial partner, Econet.

The complaints relate to the committee's consideration of the Telecommunications Bill, which will become law before Christmas.

Vodafone claims the committee failed to follow standing orders, denying it the natural justice of being allowed to see or respond to the allegations before the committee reported back to Parliament.

The bill contains regulatory changes that will allow Hautaki, the Maori trust that bought discounted spectrum from the government in last year's third-generation auctions, and its Zimbabwe-based commercial partner, Econet, to piggyback on Vodafone's GSM network.

Mobile telephony incumbents Vodafone and Telecom have been taken aback by the government's abrupt u-turn on regulation of their sector.

In December last year the government rejected the recommendation of the Hugh Fletcher-led telecommunications inquiry that it should regulate mobile telephony.

But when the committee reported back on the bill on September 18 the government ignored opposition committee members' objections, and Ministry of Economic Development officials' advice, and is now pushing through "roaming" and "co-location" regulation, requiring the incumbents to open up their networks to new entrants such as Hautaki.

The disputed submissions contained a graph attributed to KPMG Corporate Finance, which KPMG has disowned.

A "forensic reconstruction" of Vodafone's accounts projected 2001 free cashflow of $550 million. Vodafone's audited financial statements have since shown free cashflows were negative $130 million.

The submissions contained claims about Vodafone's dividends to its parent company - it hasn't paid any - and claims about the value of its spectrum which, Vodafone said, were unsupported by any evidence.

The allegations made to the committee "may have and seem to have" affected its report and recommendations to Parliament, Vodafone's complaint said.

The committee failed to come up with a consensus recommendation because opposition members refused to support the government's u-turn on regulation. The bill is therefore being rammed through Parliament by means of a supplementary order paper.

Act New Zealand MP Muriel Newman this week tabled a barrage of parliamentary questions aimed at uncovering the extent and content of meetings between government members and representatives of Hautaki and Econet.

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