Forum: Bubble bursts for Telecom’s business customers

For some reason, Telecom chose to outsource a key part of its business customers' experience to someone else

For the past two issues Computerworld has been detailing the world of pain felt by small- and medium-sized businesses trapped in Telecom’s disastrous YahooXtra “Bubble” outsourcing exercise.

The emails from Telecom’s business customers just keep rolling in.

The Bubble was floated last August as a joint venture between Yahoo Australia and Telecom, with Yahoo holding the majority shareholding.

The new service was announced as being “free and exclusive to all Telecom internet customers”. The announcement declared: “Yahoo!Xtra Bubble will offer a suite of premium services accessed through a personalised homepage all at no extra cost”.

Telecom’s Adrian Littlewood said the Bubble would be the first such offering in the New Zealand marketplace.

“Yahoo!Xtra Bubble is effectively a VIP area for Telecom internet customers,” he said. “We expect strong uptake from both existing and new customers.”

He said the service would act as a “compelling differentiator”, and he was right — but in all the wrong ways.

One of the great new features was going to be premium email, described at the time as “best of breed storage capacity, increased spam protection and up to 10 additional mailboxes”.

600,000 Telecom internet subscribers were moved from the Xtra email platform to a Yahoo hosted service.

Since then the tale has become a sorry one indeed. It became clear from very early on that while the Bubble might work for consumers, it was a far from an ideal solution, at least as constituted so far, for small- or medium-sized businesses or even for sole traders.

Now Telecom has effectively admitted this, announcing last week that it was setting up new services aiming at small business users. According to a report in the Dominion Post’s Infotech section, the service will arrive some time in the next two months.

That may — or may not — be blessed relief for Telecom’s customers. We’ll have to wait and see whether it is implemented properly.

What is facinating about the whole sorry mess is that these smaller business customers could be among Telecom’s most important — and the key to future growth. Broadband and ISP services were identified by Telstra CEO Sol Trujillo as one key growth area for Telstra when he announced his strategy for the company back in 2005.

Telstra had lost a bit of market share at the time and the company was determined to win it back. Yet, for some reason, Telecom chose to outsource a key part of its business customers’ experience to someone else.

The fallout of that is what we have been writing about for the last several weeks.

Tony Arcus, a director of Wairarapa-based Access Information, whose clients have been affected, puts it simply: “The sad reality is that Xtra has no control over its email.”

We can only hope this new service finally delivers, not the new web-based applications pumped in the media last week, but email that works.

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