Telecom does what it needs to
Opinion & Analysis
OPINION: Telecom has done what has to be done, splashing out $20 million to change its name.
As someone who arrived in New Zealand in 1998 with no preconceptions of the company, it took a while for me to twig Telecom would always labour under the history created by its controversial privatisation.
To many, Telecom was a recalcitrant corporate behemoth; one that the Auckland media loved to hate.
From the outside looking in, there may have been a little of that, but it was primarily a curiosity. A full-service bonsai telco in the tiny, lovely plant pot that is New Zealand; a vulnerable technology-taker being blown on the winds of a rapidly-changing industry. A pretty open and honest company, actually, though not always an especially effective one.
The Telecom brand simply has too many negative connotations, generated by its previous monopolies, to be worth keeping. It is also dowdy.
Aside from the fact that it still owns the (increasingly less-relevant) Public Switched Telephone Network, it is just one of three potential large retailers in the telco market. The others being Vodafone and any partnership that 2degrees forms with internet providers.
In order to have much chance of persuading people who have left it for other providers to look at it again in a fresh light, it needs to rebrand itself as just another player in the market, not something synonymous with the industry itself.
Unsurprisingly, the rebrand has not been an instant hit. Fonterra's name was laughed out of court by many when it was unveiled in 2002. Z Energy's rather snappy logo also had its detractors, but has proved part of a branding success. We quickly get used to change; there is a lot of it around.
Of course you could argue all money spent on marketing and branding and such fluff would be better spent on real services, in which case; fair enough. But the fact is people are influenced by such things.
The real question around Telecom's rebrand has just been one of timing. There has been no perfect time for Telecom to change its identity before now and unfortunately it still isn't on the horizon.
Telecom will probably be contractually unable to ditch Yahoo as its email provider until the end of next year without mucking about Xtra users still further, so Spark will probably launch midyear still encumbered by Xtra's woes.
Each new failure will be doubly-value-destructive in the early days of Spark and this year has not started brilliantly for Telecom, with multiple outages on its mobile broadband network.
As recently as Thursday, its dial-up internet service was offline nationwide for several hours. Yes, there are still 39,000 customers using its dial-up service to save a few bob, though apparently only about 20 to 30 per cent of them regularly use it.
The issue of executive pay is another that may cast a longish shadow over the firm as it embarks on the tough job of trying to remould public perceptions.
But it is good to see Telecom take a stride towards escaping its past. It has a fair bit to shake off.
- Fairfax Media