Let’s not mince words here: TelstraClear pulling out of the fixed/wireless project in Tauranga is a fiasco. Furthermore, it’s something of a stretch to ask us to believe that it was a mere contractual disagreement with Vodafone that made TelstraClear can the project with $50 million allocated to it over four years.
Although the papers were signed on March 15, TelstraClear claims Vodafone made a last-minute change to the roaming agreement. According to TelstraClear, this meant the Business Plan, under which Tauranga Unplugged customers with 07 numbers could make and take calls anywhere in the country, failed.
Vodafone however denies there was any such agreement on 07 roaming. Landline numbers are tied up to free local calling areas. Being able to roam with such numbers effectively dismantles the whole concept of free — let’s call it un-metered — local calling.
Is this something Vodafone could have unilaterally agreed to, without the Telecommunications Carriers’ Forum industry organisation’s support?
TelstraClear insists that the decision to can Unplugged was taken entirely in New Zealand, with the board’s approval. Sol Trujillo had nothing to do with it, we’re told. Yeah, right. Pass the Tui.
The sense of disappointment over TelstraClear’s pull-out is palpable. Tauranga mayor Stuart Crosby, who had supported TelstraClear throughout the network build, was only informed last Sunday about the closure. He was supposed to hold the first live call with Alan Freeth, TelstraClear’s CEO, over the network the week before last, but that media event was cancelled without explanation.
Crosby would like the parts of the 3G network, as supplied by Ericsson and capable of 14.4Mbit/s, that were built, to remain in place with a different operator stepping in to complete the rollout.
However, TelstraClear is turning a deaf ear to Crosby’s request and has started dismantling the equipment. It will now be shipped to Australia instead, for use on Telstra’s NextG network.
Is this an incumbent wannabe spitting the dummy, or simply ineptitude? Judging by the wild and woolly email Alan Freeth sent out before Christmas, it’s the “trajectory to disaster” he spoke of gathering pace.
Instead of anticipated profits and promised competition, TelstraClear has delivered mostly hot air for the New Zealand public and losses for its Australian shareholder.
TelstraClear needed a mobile network to get anywhere in the New Zealand retail telecommunications market. Without Tauranga, it is left with the low-margin crumbs off Telecom’s table, dependent on the incumbent and slow-moving regulation to win access to retail customers.
That hasn’t worked in the past and there’s no reason to think it will work any better in the future.
TelstraClear has a national network of assets that lie under-utilised because it can’t reach the retail customers needed to feed them.
With that in mind, what’s to say Sol Trujillo and Co won’t decide to cash out in New Zealand while there’s money to be had, and invest in survival closer to home? Was that what Sol was talking to the government about during his last visit here?
So, where to next, TelstraClear? How many more years will you be around in New Zealand?