No end in sight for TelstraClear

Far from calling it a day in New Zealand, TelstraClear is positioning itself for a run at the top end of the market, says chief executive Allan Freeth.

While daily papers yesterday described TelstraClear as changing direction and even "throwing in the towel", Freeth says that couldn't be further from the truth.

Instead, Freeth says TelstraClear has completed its strategic review of assets, decided on a course of action and has the support and ongoing commitment of its shareholder, Telstra Australia.

"We've been focused on revenue in the past and not on profit and that's going to change."

With the information he's gleaned from the review, Freeth says he can make the changes the company needs to make in order to survive.

"We've looked at our internal processes and at our customer segmentation and product lines. Not surprisingly, we discovered that when we offer services 'on net', that is on our own network, we're far more profitable than when we offer services 'off net'."

Freeth says he wants to increase profit for his shareholder and the best way to do that is by increasing customer satisfaction with the services TelstraClear has to offer.

"What we discovered is that we have little control over those services we do offer where we're simply reselling Telecom's products and that's reflected in the customers' experience." In some instances, says Freeth, TelstraClear is acting as "little more than a debt collector on behalf of Telecom" and that's not a viable business in the long term.

Having said that, Freeth says TelstraClear isn't about to abandon any customers it already has.

"There may be some adjustment of pricing to reflect the nature of the service we're re-selling but we're going to stop putting in all that time and effort trying to make the service do what it won't." Instead, Freeth says TelstraClear will focus its efforts on those areas that do make a profit, and that's good news for business customers.

"TelstraClear has taken a leadership position in IP networking and our range of corporate and government customers reflects that."

TelstraClear will continue to grow and expand its ICT services arm, although that's far from an easy task.

"ICT trips off the tongue easily enough but in practice it's a lot more difficult to achieve than that. We've got to work harder in that area and we will because the rewards are there."

Freeth says TelstraClear is not about to give up on New Zealand, and Telstra is not about to give up on TelstraClear. While new Telstra CEO Sol Trujillo is conducting his own strategic review, Freeth says TelstraClear's position is secure.

"Although we started our review before theirs, we've adapted ours to fit their methodology where we needed to. Our board has also benefitted from their experiences, and the Telstra CFO has said 'you can't wait, you've got to get on with it' so we are."

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