Choice of leadership will tell Telecom's Internet strategy

Telecom's choice of leadership for its two new Internet groups should provide a crucial steer to the company's strategy. Telecom announced yesterday that it is splitting its Internet business into two new units - a consumer group, which will keep the Xtra name, and a new business solutions unit. Everything is reportedly up for grabs in the restructuring, including senior management positions.

Telecom's choice of leadership for its two new Internet groups should provide a crucial steer to the company's strategy.

Telecom announced yesterday that it is splitting its Internet business into two new units. One will keep the Xtra name andpursue the consumer market and the other will become "the nucleus of a new, intensely-resourced online business solutions group, according to Telecom Services general manager Theresa Gattung.

@IDG understands staff have been told that everything is up for grabs in the restructuring, including senior management positions.

The new Online Solutions Group follows on from a vision statement issued late last year by outgoing CEO Roderick Deane. He placed the company at the head of a move online by New Zealand business, with a particular emphasis on electronic commerce.

Gattung, who has already been rumoured as the senior manager most likely to take up the torch from Deane in Telecom's move online, has already signalled one proposed change to the Telecom Services structure - the formation of a Product and Service Development group, "allowing business units to focus very directly on marketing to their customers."

This appears to suggest work will begin on break-up of at least some parts of the business, although there's no sign yet that Telecom wishes to divest itself of its content operation.

Gattung has personally presented the proposed changes to staff, who have been asked to give feedback on the ideas over the next week.

Gattung describes this year as "a challenging and exciting time for Telecom. We need to evolve to keep pace with the demand of the new online world while, of course, continuing to maximise growth opportunities in the existing business.

" The Online Solutions Group will work closely with business and corporate customers to help them transform their businesses into online operations. Our customers in the business marketplace are keen to explore the huge cost-saving potential and competitive advantage which the online world will deliver,” she says.

Telecom's decision to go first for the consumer market when it launched Xtra in 1996 surprised many in the industry. The ISP has not turned a profit or etched out a consistent strategy for online content since then, but it dominates the local Internet access market, with more than 150,000 customers and produces more Web content than any of the country's established media businesses.

“Our current online provider Xtra has been tremendously successful," says Gattung. "Building on that success, we plan to take our business to the next stage by reorganising Xtra into two focussed units. One, Xtra, will target the fast-growing consumer market, and the other will become the nucleus of a new, intensely-resourced online business solutions group to operate in the corporate and business marketplace."

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