As the new telco regime takes shape, three people will be pondering their futures.
Theresa Gattung has been in the mainstream media more often in the past week than at any other time since she took over as chief executive of Telecom in 1999.
Between the government’s announcement, Telecom’s quarterly report and the continuing fallout over AAPT, and then the gaffe with her statements about confusion being a telco’s favourite marketing tool, it’s been a tough week for Gattung. When the National Party abandons its “private property invasion” line in favour of supporting what is clearly a groundswell of public support for the government’s intervention, it must be quite lonely at Telecom headquarters these days.
Gattung has the support of chairman and former chief executive Rod Deane, but clearly, questions will be asked about whether Gattung can continue in the role.
I like Gattung. We’ve met — and crossed swords — on numerous occasions. She has a sharp sense of humour, her brain clearly works far faster than her mouth can keep up with at times, and she has assembled a good team of executives. The problem, clearly, is that the exec team is wedded to this idea that Telecom’s monopoly must be guarded at all costs. If Telecom couldn’t see the writing on the wall after the prime minister’s opening speech to Parliament this year, it was self-delusion that was clouding its view.
On the one hand, Gattung and her team have done a tremendous job of fending off regulatory intervention for the best part of six years. On the other hand, now that it’s come to a head, it’s time to get on with the job and realise it’s a brave new world. Telecom can either embrace the new regime or dig in its toes and, to use one of Telecom’s favourite words, get even more “belligerent”. Gattung must take her share of the blame for not anticipating the government’s response but she is well placed now to help drive the company forward and to take advantage of the new regime where she can.
Not that there’s any shortage of talent at the top of Telecom — should Gattung go (and I don’t think she will until Deane does), I see two men in good positions to vie for the top job.
Kevin Kenrick has done a magnificent job of turning around Telecom’s ailing mobile division. He is now charged with leading the entire consumer division of Telecom — fixed line as well as mobile.
That’s quite telling, because Telecom is required to deliver accounting separation and potentially, should things not go smoothly, structural separation by the end of next year. Kenrick is well placed to lead the retail division of Telecom into that new competitive marketplace.
The other contender must be chief financial officer Marko Bogoievski. He has the ability to engage in an actual conversation without resorting to marketing speak, an ailment that afflicts too many of our top executives. He also has the financial background that a CEO needs to call on and from the financial markets’ perspective, he would be a good choice to lead the company.
Of course, if Telecom does end up being split in two, there would be two CEO roles on offer, so that would work quite nicely.
The second person to be pondering the future must surely be Woosh CEO Bob Smith.
Woosh is in something of a tight space; its ability to undercut Telecom’s price point will vanish as naked DSL is introduced. Woosh has been badly let down by its technology partner and can only now deliver voice, something that’s seen more as an add-on than a core technology, so users aren’t convinced in large numbers. Currently Woosh has just over 20,000 users — not many when you consider how long the service has been running or how much has been spent on building the network.
Woosh’s other unique proposition, portability, is also about to vanish. Vodafone is rolling out its upgraded service and aims to tackle Telecom’s DSL service on price. That leaves Woosh, with its 1Mbit/s service, out in the cold.
The third ponderer is Telecommunications Commissioner Douglas Webb. After three years of working to fix the market, it’s taken intervention by government to deliver on the promise. Governments appoint commissioners so they can wipe their hands of the outcome. Hey, they say, it’s not us doing this. It’s the commissioner, in an unbiased and open manner. Sorry if you don’t like the outcome, but that’s just too bad.
Instead, the minister and cabinet has had to get its hands dirty and be held up for blame if it all goes wrong. A strong argument could be made that Webb simply didn’t have the tools needed to do the job, but his anti-unbundling decision in 2003 must surely count against him.