In part two of Computerworld's Q and A with Telecom's acting CEO Chris Quin - who returns as head of Gen-i on Monday - talks to Sarah Putt about Gen-i's lost business, 700MHz spectrum and the issue of content as a driver for the uptake of Ultra Fast Broadband.
Gen-i has had some difficult times of late; it lost a couple of big contracts – ACC and Fulton Hogan.
We didn’t lose the contract at ACC, we didn’t bid. We were very clear about that.
But you lost Fulton Hogan to Datacom, any comment on that?
Never like losing a customer. The team gave it a great effort. Fulton Hogan is bigger in Australia then New Zealand now and Datacom are on the end of ten years of growth in Australia. They did a great job and were able to celebrate the story.
There are lessons out of every win and every loss, and we know what those are and we’ve made great progress in addressing them.
There is a little bit of concern about trans-Tasman offerings. We had Rhoda Phillippo, who worked alongside you at Gen-i, say in Computerworld a couple of weeks ago that the trans-Tasman offering in ICT is very skinny. What do you say to that?
I didn’t read that article; I’d have to have the whole article for context.
As I say, I’d like to see the whole article but trans-Tasman offerings are vital. There are between 300 and 500 companies out of New Zealand that have significant Australian operations. We’ve got the privilege of having the business of many of those. So Fulton Hogan, we’re still the telco provider, the IT has shifted sure but not the telco.
How many people work for Gen-i?
Is that going to change?
It has changed over the last couple of years, it’s down about 400. It will continue to grow on the back of our success in the market. It will be very customer driven.
Will its brand remain separate to Telecom?
Gen-i’s a great brand, it’s highly recognised. It’s in a pretty positive space so there is no plan to change the brand. Telecom – we’re looking at, not brand as such, but what do we want to be now that we are a service provider, not an infrastructure owner as such. Although we own infrastructure in mobile, so that’s been the big conversation that’s been going on for the last six months. Also making sure we’re very clear about our connection to New Zealand, being much bigger on that.
The local player.
A New Zealand company. I think that’s one of the things, we are the only one headquartered in New Zealand.
You don’t want to get into the ownership debate. Where is everyone’s funding coming from, where is everyone’s shareholding. Why does it matter that we are a New Zealand company? It matters because the decisions made here are made with the New Zealand market in mind.
Are you thinking about 700MHz spectrum?
Of course we are. We’re very clear that we’ve got a commitment to going 4G. The trial - we are in the final selection of the technologies, or the vendors, we will trial with. We’re choosing sites to go live with the trial in. I think the 700 MHz auction just got delayed
You’re going out in 1800MHz aren’t you?
That’s the spectrum we own today that we can do some trialling in. We’re keen to get the auction (for 700MHz) underway and get the result out of that, we’re pretty clear about what we want out of it.
What do you want out of it?
We think it makes sense for the market to get equal allocations and what is key is that people invest and do something with it.
So there is 45MHz available, you say split it between the three mobile players – 15MHz each.
Yes, that would be our thinking.
Quite different to Vodafone, they’re saying they want 20MHz.
Sure, wouldn’t we all.
I can’t help but think that might be a negotiating position.
And negotiations haven’t started yet.
They haven’t, you’d prefer an auction to a beauty contest?
Don’t know; don’t have a comment on that yet.
I think that’s about it, is there anything else you want to say?
The key about the fibre conversation is that yes, we’ve got to have products in all markets and we will and we’re being clear about the timeframe and the commitment to building it. Then I think the real conversation for the whole of the industry is generating demand. It’s the conversation that occurred a year ago, and worryingly hasn’t moved on much.
What conversations happened a year ago? Do you mean when Ross Patterson started talking about Sky TV?
Across the board there were conversations that everyone wanted fibre and then you move to, for what? And how are you going to get value out of it. It’s clear there is a belief that making this investment will encourage GDP growth and all those things. In the end the industry needs to work out how we’re going to generate demand.
I would have thought Telecom could start by activating its Sky TV contract, it’s lain dormant for the last 18 months.
There isn’t an update to give you on that.
You could start by unmetering Quickflix content?
We’re looking at all sorts of media. You have to be looking at media and content because it’s what people want. It’s a fast changing and fast moving market, there’s a lot of stuff going on.
Would you look at unmetering services like Quickflix and iSky?
Come back to the metering issue, how big an issue is it when you’re getting 60GB and 100GB at home?
Quite a lot if its 2GB to download a movie and maybe up to 3GB if it’s high definition.
If you’ve got a 60GB or a 100GB plan, which is quite common now, that’s 50 movies.
Aren’t those plans over $100 a month, that’s a lot of money.
It’s huge value compared to... it’s come a long way. You start talking about 50 movies a month, I don’t know how much time you’d get to watch that much.
The last question – do you think broadcasting and telco should come together?
I think everybody would agree that it would be great to have a connection to the world where you consume the stuff you want. From a homeowner’s point of view that would be the simplest answer. We’ve got realities to deal with, there’s a satellite delivery of the main TV content that Kiwi’s pay for and that’s got a model that’s continuing and a growing capability of broadband at home and a growing wide set of options about what content you consume at home – Quickflix, Apple TV etc. It’s all there and one thing you know is true in the end, customer will decide.
They are deciding now, that’s the whole copyright issue. Has Telecom had to issue many notices?
We’re an ISP and compliant like everyone else. I think generally the volume of notices has been pretty low. I don’t think this has exploded into the big fire that everybody was worried about.
That seems to be because they’re holding back a bit on the movies and mostly it’s just the music industry.
It seems like its being managed sensibly so far. No one is talking about it as a big issue but it’s a continuing, going forward issue because there’s an industry to protect who produce the content and invest to do that.
Part one of this Q and A with Chris Quin can be read here.