Deane holds out olive branch to deal with "god-damned mess"

Telecom management team to provide new direction for battered telco

Telecom New Zealand today gave the first signals that it will cooperate with Minister David Cunliffe's tough new regulatory measures rather than fighting the government. Last week, Cunliffe hurriedly announced sweeping new regulation after cabinet documents were leaked to Telecom.

In a statement by chairman Roderick Deane, Telecom intends to review its future strategy and planning in order to respond to the new regulatory environment, saying it understands that the government's changes are supported by the public.

The move by Telecom comes as industry observers remain divided over how Telecom will cope with the new regulation, which Dean says fundamentally changes the telecommunications market in New Zealand.

CEO Theresa Gattung will head up a team of senior executives together with CIO Mark Ratcliffe and Kevin Kenrick, general manger of Telcom Mobile. Asked who else will be on the team. General manager of government and public relations John Goulter says that it will draw on other senior executives as needed, and that it has no fixed size.

Gattung was widely tipped to resign in the wake of the massive write-down in value of Telecom's Australian subsidiary AAPT and for being in charge of delaying and obstructive strategies that provoked the government into far heavier regulatory response than expected. She lambasted the new regulation as a "god-damned mess" on TV3's Campbell Live current affairs programme, and admitted that Telecom's strategy up until now had been based on confusion so as to keep prices and margins up.

The leaking of confidential cabinet documents to Telecom has also caused government wrath but despite the recent controversy, Deane says the board of the telco fully supports her.

Goulter says there will be money allocated to Telecom's new direction. The new capital expenditure will be announced on August 1, he says, but there will be a further more detailed announcement on the changes in June.

Voice over internet and faster broadband based on ADSL2+ for businesses and residential customers form a cornerstone of Telecom's new direction, together with an overall strategy of simplifying options for customers so as to clarify and cut costs.