Telecom wise to delay rivals as new fronts open

Having taken possession of the toys, Telecom is now no longer prepared to play nicely with the other boys. Plus ça change. It's hard to know where to begin: Telecom's rather arbitrary decision that it has in fact owned the telephone numbers all along, maybe with its decision to pull out of TUANZ or the company's increasing involvement in the outsourcing market. But it's the way the three issues relate which is of most interest.

Having taken possession of the toys, Telecom is now no longer prepared to play nicely with the other boys. Plus ça change.

Its hard to know where to begin: Telecom’s rather arbitrary decision that it has in fact owned the telephone numbers all along, maybe with its decision to pull out of TUANZ or the company’s increasing involvement in the outsourcing market.

It is the relativity of the three issues that is of interest.

Telecom recently landed itself a huge outsourcing contract with the ANZ Bank, news which has been widely reported. It has also reportedly won the contract to out-source the IRD’s network. These aren’t one-off deals. Telecom has become noticeably active in this area in recent times.

This push into outsourcing answers one of the questions posed in this column some weeks ago: “What can we expect from Telecom in the long term?” The company has quite rightly realised that the profits from owning and operating a telco in a relatively small market are not going to continue to grow forever. The advent of Internet telephony, smaller operators offering heavy discounts on international and toll calls and the inevitability of major rivals eventually gaining serious market share are all very good reasons not to rely on the New Zealand telecommunications market to keep the shareholders happy forever.

Every empire has its day, and Telecom realises this. It also realises that you can only fight battles on so many fronts, so delaying your competition while attacking other fronts is a wise strategy. By stating categorically that Telecom, and Telecom alone, owns the numbers offers the promise of enough lengthy litigation to tie up the competition for years.

Such a decision, presuming that Telecom is also going to conduct business on the basis of ownership, will affect every interconnection agreement that is being negotiated, not forgetting any contracts that will have to be renewed under these circumstances. This gives Telecom years to pursue new business opportunities outside of its traditional arena.

To leave TUANZ is probably the smartest move. By announcing it owns the numbers, the Gregorian drone in the background is only going to get louder. Frankly, who needs it? Telecom certainly doesn’t. It’s fair to presume that Telecom is probably sick and tired of the constant litigation, and has no real need to care what TUANZ has to say about anything.

Who is going to throw money at an organisation when its sole raison d’être is to take business from you on behalf of your competitors? Yet TUANZ is “disappointed” about the whole thing. Which is strange since the battle lines are well drawn. Somebody has stopped the charade. Telecom has essentially ’fessed up and said that it doesn’t care what TUANZ thinks, so maybe TUANZ can adopt a similar policy and stop perpetrating the myth that it represents anybody other than companies with vested interests.

Join the newsletter!

Error: Please check your email address.
Show Comments
[]