Moutter wants 'more assertive' Telecom

Telecom chief executive Simon Moutter
Telecom chief executive Simon Moutter

Simon Moutter reckons he has met about 2000 Telecom staff since he rejoined the company as chief executive in August and says they are tired of what one staffer described as "walking backwards slowly".

Almost a year after its sharemarket split, Telecom is still about six months away from revealing its new "strategic plan". That will set out how it will compete as a largely unregulated retail service provider.

But in his first in-depth interview, Moutter has fleshed out his early thinking, promising a "new more assertive and ambitious Telecom" that offers better deals.

"When you have a high market share, you have a tendency to be a 'slow follower' on price because you will usually have a better service offering," Moutter said.

"But there is a point at which that doesn't work and I think we are past that point. We are not the number one market-share player in mobile and at roughly 50 per cent of the broadband market - which is the future fixed-line business - we cannot afford to keep ceding market share.

"I want all our products and services to represent good value. That doesn't mean being 'cheapest' if we are better, but it means being priced right."

The new approach has seen Telecom offer what appears on paper to be the highest-value plan for pre-paid mobiles and a competitively priced broadband plan with 500 gigabytes of data. Its standard home broadband package is "now at the $75 mark, rather than sitting above".

Moutter said one of his next targets was sharpening Telecom's pencil on mobile roaming. "I've been a customer for four years," he said, referring to his four-year stint as head of Auckland airport. "I have had those big bills and I'm looking for our company to solve that problem."

A new, unencumbered relationship with Australian- based Telstra could help in that regard, he said. The $840 million sale of Telstra's New Zealand arm, TelstraClear, to Vodafone had opened the door to a "more productive" relationship, now it was no longer competing for business from New Zealand consumers, he said.

Telecom's reliance on the local market would be a plus as it competed against a merged Vodafone and TelstraClear, which would be bound by global corporate directives.

Moutter did not believe there was anything that would stop Telecom joining a handful of second-tier telcos and starting to market ultrafast broadband plans to consumers early next year, even though it would take "a bit of selling" as customers "were not yet certain of the benefits".

But still sketchy is whether and when Moutter will take Telecom into any new markets.

Telecom had the option of becoming a producer, aggregator or a premium or commodity carrier of "content" such as pay television. "Those are the options" and the decision was pivotal, Moutter said.

"We will be choosing one of those. Which I don't know, but when you look around the world there are not many examples of telcos that have made it as the provider [of content]."

Telecom would not follow them unless customers genuinely benefited and Telecom profited from that. "In my view that is a high hurdle."

Either way, Telecom seems unlikely to lead the charge for more regulation of Sky Television as Moutter said he did not see that as a big deal for the industry. "Technology is solving the problem of the effective monopoly on satellite-delivered pay- television."

Instead, Moutter hinted Telecom was more likely to eye opportunities in cloud computing, having made an early move into the information technology business in 2004, when he was serving as chief operating officer. "We got that call right."

Vodafone chief executive Russell Stanners indicated that it, too, had little interest in becoming a pay television company but said he saw opportunities in partnering with others to provide online gaming."We do not view ourselves as owning content. We have no desire to be an aggregator. What we do want to do is to do commercial deals with content owners so we can distribute it over our networks and bundle them as part of the proposition we deliver."