Yesterday, I wrote grumpily:

As a new non-executive member of a big-spending government agency’s board, I’d frequently ask “Why is the taxpayer’s money being spent on this?”   I learnt quickly that, contrary to popular perception, we actually had very little power over what we spent, why and with whom.  That was principally decided by the ruling politicians, whose decisions (either logical or appeasing some political constituency) were effectively concreted in place until overturned, if ever, by another set of ruling politicians who had decided the issue was important enough.  We could move money at the margin, but the bulk of spending was effectively predetermined under rules set down by Cabinet, and very much seen as an entitlement by the often large and influential organisations that received it.  Getting anything significant changed takes years of argument, followed by more years to implement those changes.

This begs the question “why bother being on a government agency board, then?”  A government agency is a tool of the elected government, with a duty to carry out the wishes of that government. A government board position isn’t a platform to push your own agenda and political views; after all, it’s the government that was elected, not you.  Essentially, you bring your knowledge, skills, independence and brainpower to the boardroom, not your politics.

The strategic direction comes from the government of the day, not the board.   However, although you may not sway the outcome, in reality, often you do have some input at the policy formulation and implementation design stages.  And a key role in the major operational  decision-making within that policy context when it isn’t continuation of the status quo.  You can make a difference, promoting constructive ideas, striving to make the implementation of policy more effective, mitigating some of the crazy stuff, using good judgement in the decisions you can make, and being a champion for positive change. And sometimes, even governments can move quickly.

In other words, you can be of service to your country, your community and your industry. That’s why most people do it.  (Well, it ain’t for the pay and the hours!)  But it’s very different from being on a private sector board.

Yesterday, we had New Zealand’s annual government Budget presented in Parliament.  I’m not going to comment much on the Budget - politics is not an area I stray into often.  I’ll just say that I have a sense of wasting a good crisis. My politics is classic liberalism - economic and social liberalism based on universal individual rights and responsibilities, not the American or British versions which have morphed into woolly-woofter centrist camps. So I’d have gone a lot harder on cutting the state’s activities while setting things up for the long term economic and social well-being of the country, firms and individuals.  But that isn’t my focus today.  I want to look at entitlements.

It’s a curious term  - entitlements - especially when used by a centre-right government.  It was used frequently yesterday, particularly by Prime Minister John Key in phrases like “No beneficiary will have their entitlements cut” or words to that effect.  You wouldn’t say that the supermarket is “entitled” to your money every week, nor the petrol station, nor the hotel owner if and when you take that annual holiday in Fiji, nor even the charities to which you donate.  You make choices on whether or not to spend your money, on what and with whom. But somehow, when a government spends your money for you, the recipients see it as an entitlement.

Every government spending programme - every single one - was initiated at some point by a government deciding that spending this money on that programme was a better idea than spending it on something else, or putting it in the bank, or reducing taxes. Before that decision to spend, there was no “entitlement”. The new recipients are usually intensely grateful - for about a year.  Then they start to see the continued uninterrupted and unquestioned supply of that government money as an entitlement, an inalienable right which must be maintained and grown in line with any expansion of the use for which the money was originally supplied.  Once a government starts spending on a programme, it’s extremely hard to stop, especially when citizens and institutions (public or private) receive those funds directly.  Even if the original need has gone or morphed into some unintended or even dysfunctional application.

As a new non-executive member of a big-spending government agency’s board, I’d frequently ask “Why is the taxpayer’s money being spent on this?”   I learnt quickly that, contrary to popular perception, we actually had very little power over what we spent, why and with whom.  That was principally decided by the ruling politicians, whose decisions (either logical or appeasing some political constituency) were effectively concreted in place until overturned, if ever, by another set of ruling politicians who had decided the issue was important enough.  We could move money at the margin, but the bulk of spending was effectively predetermined under rules set down by Cabinet, and very much seen as an entitlement by the often large and influential organisations that received it.  Getting anything significant changed takes years of argument, followed by more years to implement those changes. [Update: see a more positive perspective from me here.]

Let me be clear.  Although I’d probably do things very differently, most institutions and the intent for which the money is spent are  worthy and legitimate. I also recognise that changes to funding mechanisms are disruptive.  But this notion of entitlement is a real problem for us as citizens and taxpayers. It creates an ever-growing burden over generations, it ossifies society’s institutions and mechanisms, and it is a major barrier to improvement and innovation.

PS Having said all that, the Tertiary Education Commission, of which I’m a board member, contributed a very significant portion of the government’s expenditure savings. Although we also cut our operating costs - largely in line with the plan we put in place 3 years ago - the bulk of savings will come from pruning some of my pet hates, such as hobby courses funded as Adult and Community Education, industry compliance training, and various other silly funds of dubious merit. Result! 

Over at design blog Snap2Objects, they’ve compiled short profiles of 70 designers who shaped the world, “… a huge compilation of the most important product designers, graphic designers, architects and other great professionals that made part of our history contributing to the evolution that we see today in each field“.  It’s a very eclectic list - naturally, IKB is included - but, despite its length, no doubt misses out some of design’s great names.  Even so, it’s well worth perusing when you’ve got the time.

Here are a couple of samples (pity my layout design skills aren’t up to the task):

Manolo Blahnik Shoe Designer (1942-)

Working alone without assistants or apprentices, MANOLO BLAHNIK (1942-) is solely responsible for the design of every one of the thousands of shoes that bear his name. He has dominated shoe design since setting up in business in London in the early 1970s.

Norman Foster Architect (1935- )

NORMAN FOSTER is an architectural phenomenon; responsible for a dozen or more of the key buildings of the last 30 years, but also as the founder of perhaps the most financially successful architectural practice of modern times.

There was understandable public and political outrage over a Commerce Commission report which pronounced that New Zealand electricity generators had garnered $4.3 billion in excess electricity pricing.  Yet when I first heard the news, I found it hard to believe.  It seems my suspicions were warranted.  Several commentators have spotted fundamental flaws:

• The report’s author used the Californian electricity market as a comparator.  NZ is nothing like California.  The NZ system is heavily reliant on hydro-electricity, versus coal, gas and nuclear in California.  Due to geographic topology, our hydro stations have limited lake storage, unlike California’s out-of-state hydro-electricity suppliers.  And most importantly, we aren’t connected to a continental power grid with hundreds of other generators able to supply electricity in a locally dry year.
• The report focused on wholesale pricing, not retail.  No evidence was provided as to whether excess wholesale spot prices were passed onto consumers. The typical electricity customer is shielded from wholesale price movements because the retailers charge the same price all year.  That pricing effectively includes an “insurance policy” against high pricing during periods of high demand or low availability.
• While wholesale spot prices can vary wildly every half hour, most actual wholesale pricing is smoothed by hedge contracts (yes, financial derivatives can be useful).  It is only at the margin that higher (or lower) spot prices have an impact.
• The overwhelming bulk of retailing is by the generators themselves. The wholesale market and the associate hedging contracts are between those players, so it’s a nett-nett effect.
• If excess profits were being made, extra generating stations would be built by competing generators to win greater shares of those excess profits.  Yet, growth in long run capacity has closely matched growth in demand.

Typical of the naive reaction to this fundamentally flawed report has been the call for electricity to be priced at the lowest cost of generation, not the highest.  No-one would build new generating capacity. Put it another way, would you sell your house for what it cost to build forty years ago? No, thought not.  Electricity is no different.

The present NZ electricity market mechanisms have some problems, but the system works better than anything before, and it works reasonably well.  NZ has some of the lowest power prices in the world, and its electricity generation is on the whole cleaner than most.

Everyone in the NZ electricity industry that I’ve met in the last few days had the same instant reaction.  Why, before the report was released, wasn’t it reviewed by someone who actually knew something about the logic of the NZ market?

I doubt that the media frenzy over the report’s release will be matched by a similar level of media attention to the fundamental flaws in the report and its misinterpretation. Nor will there be a serious media investigation into the motives of a part of the Commerce Commission that is under political pressure over its effectiveness.

This was a beat-up that shouldn’t have happened.

Making it easy for potential customers or business partners to contact you is usually a good idea, and in these days of call centres, email, and website contact pages, it is simple to do.  But it’s a complete waste of time if no-one answers the message.

In the past few weeks, I’ve experienced appalling bad response from:

• A French automotive technology company in which I was (note past tense) seriously interested, who did not reply to repeated multiple messages via their “potential partner” contact form, their “potential investor” contact form and even their “potential customer” contact form; they also don’t have a phone number on their website - it’s “unlisted” with the directory company as well; talk about being hard to reach!
• A New Zealand beverage maker from whom I was attempting to buy their premium (subscriber-only) product, despite two requests via their contact form; having received no response, I phoned, only to hear the person who answered tell me to leave a message on the website.
• A US computer maker who only connects to the outside world via global e-commerce pages, online contact forms, and off-shored call-centres, but failed to pass on any messages to its local subsidiary via any of these channels.
• A UK exporter who lists an email contact for potential importers, but who failed to respond to multiple emails; I eventually got a response by repeatedly pestering one of their office staff to nag the export manager into replying.

For goodness, sake, why bother having modern contact channels if you can’t be bothered to use them properly?  Such poor contact processes not only irritate me, they lose you my business, because now you are clearly both rude and incompetent.

It’s not hard to get these things right. Or is it? When did you (personally) last test your contact processes?

If you’ve thought much about why your business exists, you’ve probably come up with some worthy statement of business purpose.  Good; but what about making money? I’m not denigrating high ideals of business purpose, but a business that doesn’t make money can’t achieve those ideals.  Some business leaders seem ashamed to explain this fact of life to their staff.  Indeed, in many companies, most staff do not understand how the company makes money or their responsibility and role in that.  That’s madness.  If your people don’t understand your business model and its key metrics, any targets you set may seem capricious or arbitrary.  That can mean wrong operating decisions and a high probability of staff not taking responsibility for their own contribution (or lack of it) to the viability of the business.

Let’s look at a very simple business - hourly-billed services (basic labour or top-end professional services):

• You pay people for 52 weeks of 5 days = 260 days a year.  At 8 hours per day, that’s 2080 hours of costs.
• Let’s allow for, say, 20 days annual leave, 10 days public holidays, 5 days technical training, 2 days on company process training and 3 days off sick.  That’s 40 days your people are not on the job.
• That leaves 220 days or 1760 hours to do the job.
• Assuming good productivity at say 80% (allowing for time on internal non-client stuff, proposals, waiting for new jobs to start, etc.) that’s ~1400 hours of billable work a year.
• Spread over the 220 days, that’s ~6.5 hours billable every day.

I assume that you are in a competitive industry, but your pricing of those 1400 billable hours hopefully  reflects your actual 2080 hour costs (don’t forget training, insurance, office rental, IT costs, sales, management, administration, etc, etc, etc.) plus a reasonable profit. That 6.5 hours a day is the minimum required daily billable time from your staff.  Importantly, if someone has a quiet day, the shortfall has to be made up quickly - there aren’t enough spare hours in the year to catch up a long period of low billable activity. Yet many of the people who work in hourly-billed services (and even some who run them) don’t understand these relentless numbers and their responsibility for achieving them.

Some business leaders don’t share their business metrics with their staff, perhaps because of unnecessary embarrassment about the profit motive or a concern that staff won’t understand. My experience is that people respond well to knowing these things.  I once explained the company’s cost of capital to a group of electricity contractor labourers, several of them barely functionally literate or numerate.  But simple examples in terms that were relevant to them got across the idea of relating risk and return.  That, together with an explanation of depreciation, maintenance and operating costs, saw them volunteering many suggestions for simpler line maintenance vehicles - the most dramatic being a change from their ubiquitous standard $250k line truck with HIAB (onboard hydraulic lifting arm) to more $30k utility vehicles!

Everyone who works for you needs at least a rudimentary understanding of:

• Your business purpose, market offer and modus operandi
• Your business processes
• Your revenue model
• Your cost structure (operating and capital)
• The rationale behind them
• Your people’s individual roles and responsibilities in making the business work.

PS. If your pricing doesn’t cover your costs and a reasonable return on capital, you have to change something (your price, your product, your operations, your promotion, your tough-mindedness in customer negotiations, something) to ensure that it does.  Otherwise you have to somehow get out of the business, or you’ll go broke. As the US auto industry is learning, harsh realities must be faced and overcome.

Hard on the heels of my LEGO article comes this: “2 Much Caffeine“ has used LEGO to recreate the well-known image of Isambard Kingdom Brunel, standing in front of the shipyard anchor chains for launching the SS Great Eastern. Maybe Lego could add a Brunel series to its new Architecture collection, or even create a Great Engineering collection.  I’d be a buyer!

Yes, you read that right.  According to The Sun, that eminent journal of scientific research, a survey of 2000 British men and women shows that IT people “were found to be the most selfless in the sack, the most adventurous and more likely to use love gadgets“. Of course, we computer scientists always knew this, but we’re modest, too. Unfortunately, the same survey ranks business owners poorly, which everyone who knows us will surely find hard to believe!

Have you even seen a new product from an long-established maker and thought “Brilliant!” followed immediately by “Why didn’t they think of it ages ago?” because it’s such an obvious thing for them to offer, now that someone’s come up with it.  Lego has just announced a new range of kits to build models of great architectural masterpieces, starting with six Frank Lloyd Wright sets including the Guggenheim Museum and the Fallingwater house - both of them astonishing, considering that FLW was born in 1867.

I expect the demand for these Lego products will be from aspiration-minded parents and grandparents, rather than the kids themselves who go for the cartoon-like pirate and space sets. No prizes for guessing who - as usual - does the first assembly “just checking the instructions”, while Junior rolls his eyes from the sidelines!

So what brilliant, blindingly obvious iconic product are you not offering?

Every evening when my father came home, the first things he would do were to undress in the kitchen, press his uniform (he was a soldier), hang it up properly, and then clean and polish his boots.  I remember him standing in his boxers and shirt in the kitchen, ironing his trousers, and telling us that a clean and tidy appearance was essential for respect - of oneself and by other people.  It didn’t matter how expensive or cheap your clothes were, if you looked scruffy.  As a manager and as a mentor, I’ve passed on the same advice many times:

1. Keep yourself clean and well-groomed -  no body odour, no bad breath, no dirty nails, no unkempt hair and no rat’s-nest beard.  Use deodorant and breath freshener if you have problems (or been out on the town the night before). Display your designer stubble only on your own time (and even then, only if you have the good looks to carry it off).
2. Keep your clothing clean, repaired and PRESSED. There’s nothing more effective than a pair of shiny, over-used, dirty and unpressed trousers to say “Loser.”
3. Likewise, clean and polish your shoes regularly - and maintain them.  Wearers of down-at-heel, scuffed and cracked shoes - see previous entry.

Changing the explicit or implied dress standard can be a subtle, yet powerful tool in revitalising a moribund organisation.  The first place to start is grooming, and you as the leader set the standard through your own example.

PS As I comment below: I didn’t specify here what the style of dress should be - only the standard of grooming. I’ve moved organisations from suits to smart casual, and grey shoes & cardigans to suits; whatever works for the business change needed. But whatever your personal or organisational style, be clean and tidy if you want to be taken seriously as a leader.

The Economist reports on a proposal to make quiet vehicles noisy!  Yes, that’s right.  One of the anticipated benefits of electric vehicles is much reduced noise.  You’ll still get the sound of the tyres on the road, but an electric motor makes barely any noise compared to an internal combustion motor.  In a noisy world, this is a problem for blind people - and people in general, given we rely partly on noise to alert us to cars coming.  A bill currently going through the US Congress stipulates a minimum noise level for vehicles. In effect, if your new electric car is too quiet, you’ll have to install a noise-maker.

While the transition period - between all cars making engine noise and most making almost none (when tyre noise would be adequate warning) - may create some awareness problems, it’s crazy to throw away such a great improvement in the ambient environment. And noise-making is energy-wasteful as well.  The US draft bill is the  modern equivalent of making someone walk in front of a train with a red flag. It’s the wrong answer to the wrong problem.  Surely we can come up with a better design solution than this?

The OECD has just issued its annual survey of tax on wages using 2007/8 data.  Some readers may be surprised at where their country of domicile ranks. However, these simple averages are misleading:

• GST, VAT, sales tax and local government taxes, etc. are not included.
• What about the higher earners, say 65 or 75th percentiles? For example, NZ’s higher tax rates rate kick in at very low $ levels, by comparison with other countries.
• And let’s not even mention the differences between countries regarding real wages, local purchasing power, and tax or tax breaks on interest, dividends and imputation, mortgage interest, pension contributions, capital gains, inheritance, house purchase stamp duty, fuel tax, road tax, etc, etc, etc.

It’s a bit like comparing airline fare deals.

The President of the European Central Bank, Jean-Claude Trichet, commenting on the economic situation, said “As far as growth is concerned, we’re around the inflection point in the cycle, that’s the sentiment,…” Many took this to mean that the recession had reached a turning point, that it was bottoming out.  WRONG!  This is how economist and Financial Times blogger Willem Buiter vented his spleen over the mathematical illiteracy of most commentators:

… Trichet did not say that the recession was bottoming out.  He said that it had reached an ‘inflection point’…  Unlike the gormless arts students, limp-minded lawyers and woolly social scientists that dominate British and American economic policy making, President Trichet actually knows and understands mathematics.  An inflection point is not a turning point.

An inflection point is where the shape of a curve (in a graph) changes from concave to convex, or vice versa.  Let me put what Trichet said another way.  The economy is like an aircraft falling in a terrible dive that’s been getting steeper and steeper. However, the nose has just started to come back up.  We’re still in a dive, but from here on, the dive will get shallower and shallower.

That point where the nose started to come back up was an inflection point. Trichet thought he was addressing a technically-literate audience who’d understand his use of the word.  Clearly, that was a wrong assumption, and one we probably all make from time to time. A useful reminder, as well a nice line in grumpiness from Professor Buiter.

The Dominion Post reports that the founders of HELL Pizza have bought back their NZ master franchise 29 months after selling it to TPF, the owners of Burger King in New Zealand.

Callum Davies, Stu McMullin and Warren Powell opened the first Hell Pizza in Kelburn, in Wellington in 1996. With a menu and branding themed on the seven deadly sins and a penchant for provocative marketing campaigns, which included giving away condoms to promote its lust pizza, the chain had expanded to 66 stores by the time it was sold for about $15 million in December 2006.

The founders would not say how much they bought it back for but it is understood they paid less than they sold it for.

HELL’s founders sold their NZ operation to generate cash to expand internationally, establishing HELL in Britain, Australia, Ireland and Canada.  Under TPF, HELL NZ seemed to lose its way. Those who bemoan the sale of businesses will no doubt use the HELL buyback to push their barrow about the evils of companies being sold to “corporate” or “overseas” owners, who then “destroy” a good business. What’s not mentioned are the far greater numbers of business that prosper under new ownership, or the productive use of the sale money to reinvest in other ventures, new or existing.  And founders can destroy businesses just as easily as subsequent buyers.

However, it’s not unusual to see founders buy back businesses that they’ve sold, especially if they’re still involved somehow, and often for a much lower price than they received when they sold it in the first place.  I can think of several examples where I know the principals personally.  The extra capital they can apply (gained from the original sale and from their other ventures), combined with their renewed passion for the business, often takes the business on to new heights.

HELL built its brand on up-market pizzas and cheeky promotions.  Here’s the message to entice you to open an online account:

Your soul doesn’t do much. You can’t feel it. You can’t see it. It sucks at making coffee, and when you’re buggered after a hard day, it’ll never have dinner on the table. So give it to us. Then you can begin your descent into HELL. The deeper you go, the more retribution you’ll receive for your measly soul. The retribution could be anything from free morsels of food to exclusive access to random stuff. That all depends on how good you are at being bad. And if you make it right into the darkest depths of HELL, then you’ll receive free pizza for life. So sell your soul to us.

Sydney Padua at 2D Goggles, the creator of the Lovelace and Babbage comic, has developed a new character - my hero, Isambard Kingdom Brunel!

Brunel was like the Wolverine of the early Victorians.  He was short, ripped, had big sideburns, smoked 50 cigars a day, AND KICKED EVERYONE’S ASS!!

At last, the IT industry gets the comic book heroes we’ve been long awaiting.  Over at 2D Goggles, Sydney Padua is working on “Lovelace and Babbage“!  I see some serious T-shirt moments ahead for the cognoscenti. Economists might enjoy this too; or maybe not, if they’re sensitive types.  (Update: for the non-cognoscenti, click on the links for some historical background on Charles Babbage and Ada Lovelace, the putative 19th century founders of computing).

The good news keeps coming at Kiwi online accounting  firm Xero, which has announced a partnership with BT, the leading UK telecommunications company.  Xero shares, already lifted by MYOB founder Craig Winkler’s investment and winning global recognition with two Webby awards, rose 20% on the BT news before coming back slightly up on the open.  The marketing channel agreement expands Xero’s relationships with leading national telcos targeting small business, including Telecom NZ and Telstra. Telcos can very much more easily reach millions of small business customers in ways and at much lower cost than just about any other channel. BT in particular is seen as the trend-setter in offering a comprehensive suite of products and services for small business, and Xero fits in perfectly. Rod Drury and his team have adopted a smart strategy.

Disclosure: Isambard Investments owns Xero shares.

“How many globally competitive companies do we have? How many more do we need? How do we help them become so?“

Business journalist Rod Oram posed these questions yesterday in a Sunday Star Times column entitled “Fuelling the export high fliers.”

How many do we have?

“… about 350 globally competitive companies, according to analysis by the Icehouse, the entrepreneurship centre at the University of Auckland’s business school. In addition, we have some 400 domestic market companies that are equally competitive, judging by their ability to win business here from foreign rivals. Potentially, many of them could become exporters.“

How many more do we need?

“… to meet our economic goals we need four times as many. And each needs to be two to three times bigger than those 750 typically are today.” [Icehouse chief executive Andy Hamilton]

“… Achieving an additional $35 billion of exports by 2020 will require an additional three Fonterra-scale companies (current exports about $10.5b), or about 500 Rakon-size companies (current exports around $70 million), 150 Pumpkin Patch companies (current exports over $200m), or over 2300 companies the size of 42 Below (current exports around $15m).” [NZ Institute, 2006]

The 2002/3 ICT Industry Task Force, of which I was a member, suggested a goal of building 100 technology-based companies, each achieving $100 million in annual revenues within 10 years.  People laughed at us at the time.  Clearly we weren’t thinking big enough!

How do we help them become so?

Nearly two years ago, I addressed a similar question: “How do we get more of our companies growing?” This isn’t an NZ-only problem. Go to Australia, Britain, Canada or even states within the USA, and you’ll find people asking the same thing. And for some strange reason, everyone looks to “the government” to come up with the answer.

“… If there was a magic bullet, every government and every CEO would be shooting it. There are some factor conditions which can support business growth…

• A good education system which produces a skilled talent pool.
• In particular a learning programme which helps entrepreneurs to acquire the skills they need to grow their business.
• A supportive investment environment which encourages growth (private equity, stock market, banks, and investors willing to participate in them).
• Good infrastructure, transport and communications both within a country and between countries.
• A supportive regulatory and tax regime…”

Oram describes some initiatives already in place, notably the excellent Icehouse education programmes for business owners and leaders, and some promising government-sponsored programmes:

“Manufacturing Plus, which helps companies identify and develop strong global niches; Lean Manufacturing, which helps them develop operational excellence; and Better by Design, which helps them apply design disciplines to company structure and culture, product development, brands and other essential ingredients in generating high-value goods and services“.

NZ governments have responded well to the need to develop business skills and know-how.  Infrastructure remains a challenge, but is on the funded agenda at last.  And there’s yet another initiative on tax. All well and good, but - reiterating my earlier writing - these initiatives will only support, not create growth. The main impetus must come from the individuals who own and/or run potential growth businesses, and that’s essentially about self-confidence, success and the desire to keep growing.  Governments can’t do anything about those.

Disclosure: I have been a mentor of Strategia, a “lean business” consultancy which is one of the partners in the government industry programme, and whose founders were my old manufacturing management team at Deltec.

From KAL at the The Economist:

I have refrained from comment on the Telecom Vodafone “interference battle” until it reached some outcome.  The two sides have just announced that they have reached an agreement out of court.  Telecom will delay its launch date by a couple of weeks and Vodafone had stopped its action.

For my non-NZ readers, New Zealand’s two major mobile telecommunications operators have been involved in a PR and courtroom stoush over the alleged interference of Telecom’s new XT network with Vodafone’s network, with Vodafone seeking an a court injunction to stop Telecom launching its network because Vodafone’s customers are experiencing major service failures. Few commentators have been scrupulously neutral, assuming either that Telecom is incompetent and arrogant, or that Vodafone cunningly mounted its court action just days out from the network switch-on as a PR stunt to put Telecom in the wrong.

I used to run Deltec, a company which made filter and antenna systems for mobile telecommunication networks. We sold 95% of our production  offshore in all the major telecommunications markets, especially in large urban centres with multiple operators in very adjacent frequencies using identical technology prototocols.  The numbers of cellsites, operators and customers are usually 2 or 3 times that of the NZ situation.  Signal interference is normal during the early days of a new cellsite (even more so for an entire new network) when there is already an incumbent in the area.  The fault may lie with the newcomer, but it is just as likely to lie with the existing operator’s cellsite receiving or transmitting signals outside its allocated frequencies.  The general practice is that each instance is taken on its merits, both sides’ engineers work it out, and take appropriate action quickly.  All very low key, routine, professional and civilized.

Deltec was the dominant antenna supplier to both Telecom and Vodafone until we sold our business in 2001. What’s different about the NZ situation?  Telecom has (at long last) joined the same technology family as Vodafone and much of the world.  But for 20 years, we’ve only had two operators, operating in widely different frequency bands with completely different technology protocols.  Vodafone and Telecom engineers and management are not used to having another major wireless network in such close technical proximity.  Both are likely to have had sloppy frequency management (it wasn’t an issue), but rarely been pulled up on it before. More relevantly, neither company is used to dealing with the other on technical issues where collaboration rather than confrontation is the norm.

As for the court action being a stunt, who knows?

PS: Interestingly, whenever we hosted people from Telecom and Vodafone together in technical or social contexts, it was always very friendly, with both sides getting on well.

PPS: I forgot to mention that my family trust owns Telecom securities.