Business stands to benefit from TelstraClear rejig

TelstraClear's review of its current services is good news for business customers, says chief executive Allan Freeth.

"We've identified four trends internationally that are growth areas for telecommunications companies and we want to make full use of that understanding internally."

Freeth says those four trends -- broadband, mobility, IT services and the move to an all-IP network -- are key drivers for the company and he has called on staff to re-focus on them.

"In the past we've tried to be all things to all people and frankly that's not working. I believe we need to focus on two areas -- profitability and customer experience and that's what we're going to do."

TelstraClear is already a market leader in IP networking, says Freeth, and it will continue to expand on that platform.

"You've just got to look at our customer base. We've got a lot of the corporates, a lot of the government agencies and we'll continue to target those markets."

In addition, Freeth says TelstraClear will beef up its IT services arm and doesn't rule out further acquisitions following the company's purchase of integrator Sytec.

"We're still digesting Sytec. Actually, that's unfair because it's the other way round. We're integrating our IT services team into Sytec."

Freeth says while the phrase ICT may "roll off the tongue" it's actually far more difficult to put an integrated IT and communications service into practice.

As for the other two arms of the strategy -- broadband and mobility -- Freeth says he expects to see developments in the near future, at least in the mobility market. He says Telstra's new management team, lead by former US mobile network executive Sol Trujillo, has played a large part in that process.

"They bring an increased awareness of the benefits of mobility as a platform to the board and frankly we're going to make use of that."

Freeth wouldn't be drawn on whether TelstraClear will be building its own network, whether work had already begun or whether it would continue with a third option, such as a continuation of its current reseller arrangement with Vodafone.

However, he did say he didn't need to wait for Telstra's own internal review, the results of which are due out in November.

"The message from the board has been clear -- we've got to get on with it."

As for broadband, Freeth says the subtlety of TelstraClear's plan may well have been lost on some commentators. Freeth says simply reselling Telecom's services is not enough as TelstraClear cannot control the quality of service the customer is receiving. However, far from simply cutting customers off, the company will refocus its efforts elsewhere.

"We did consider the 'napalm' option of simply doing away with the resale services altogether but instead we've said we'll stop spending our time and effort trying to make more out of the service and will focus our attention on things we can improve and can make a profit from."

Freeth has been critical of the wholesale environment in New Zealand as it stands today and says TelstraClear simply can't compete in such a market. He says he is not about to allow TelstraClear to be used as a patsy to prove there is competition where there is not.

"Until there are significant changes to the wholesale regime TelstraClear will not provide a choice in some markets. That's been a tough decision to make, but we are not a social service and nor will we allow ourselves to be used, in an attempt to show that there is true competition in the New Zealand market place."

TelstraClear's restructure will result in layoffs but Freeth says which staff and how many are yet to be determined.

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