OECD Report on Telecommunications

I’m late blogging this but want to highlight how we compare to other OECD countries in regards to telecommunications.

First of all as TUANZ notes, we spend much more in NZ on telecommunications than any other country. A total of 5.4% of GDP compared to an OECD average of 3.0%. We are placed 1st of 30 for total spend.

So you would think with such a high level of telco revenue, we would be near the top for capital investment. But alas we spend barely half the OECD average as a % of revenue on capital investment. Just 8.7% of telco revenue went into capital investment, while the OECD average is 15.3%. So we are 3rd lowest of 30 for capital expenditure.

This is why the changes made last year were so necessary. NBR referred to the crushing weight on our economy and at 5.4% of GDP that is indeed a huge weight. And to have so little of it go back into capital investment indicates a market failure.

The Herald also has some good extracts, comparing investment levels in various countries.