Gattung admits Telcos not being straight

By Peter Nowak

Telecom's public image may take another hit as an audio clip of Theresa Gattung circulating on the internet has the chief executive admitting to the company "not being straight up" with customers.

"Think about pricing. What has every telco in the world done in the past? It's used confusion as its chief marketing tool. And that's fine," said Gattung in a speech recorded on March 20.

"You could argue that that's how all of us keep calling prices up and get those revenues, high-margin businesses, keep them going for a lot longer than would have been the case.

"But at some level, whether they consciously articulate or not, customers know that's what the game has been. They know we're not being straight up."

Gattung made the comments as part of a speech given to analysts in Sydney about the company's plans for the future. They were made in the context of how Telecom was changing its business model to give more power to customers, spokesman John Goulter said yesterday.

"The point she was making is that telcos traditionally have had very complex products and that this has been confusing for customers," he said.

"What she was talking about is the new paradigm that we're moving to ... which is all about having a much more transparent, open and easier-to-understand set of products so that customers have a lot more control." Full audio had been available on Telecom's website since the briefing.

But media commentator Russell Brown, who posted an excerpt of the speech on his Public Address blog, said the context didn't necessarily excuse the comments.

"In a way it's an admission that that was the foregoing business model." Brown said Telecom's recently unveiled broadband plans, which increased the number and complexity of offered services, were a good example of the company trying to confuse the marketplace.

"If you didn't think they were confusing, you weren't paying attention," he said.

Gattung also fronted up to a personal failing during the speech, and said she hadn't done enough to polish Telecom's tarnished public image.

"We must re-engage with the hearts and minds of ordinary New Zealanders ... If there's anything I really have not done as well as I really wanted to in the last five years, it would be that."

She also indicated that Telecom was not overly concerned with possible Government regulation, which turned out last week to be harsh.

The company was less concerned than it was a year ago, Gattung said, and compared regulation to women and ageing: "It's inevitable but some days you feel better about it than others." She said the move for regulation had been contrived by the company's competitors and by the media.

"This isn't being driven by the regulator. This is pretty much a manufactured grievance. You know that's the case because the only people marching in the streets about it are our competitors, not customers."

Gattung also said that contrary to what the media was reporting, the unbundling of Telecom's local loop was far from a done deal. She also doubted the Government would take any serious action against Telecom.

"The Government is way too smart to do anything dumb here."

THE QUOTABLE THERESA

* On service pricing:
What has every telco in the world done in the past? It's used confusion as its chief marketing tool ... customers know that's what the game has been. They know we're not being straight up.

* On the need for regulation:
This is pretty much a manufactured grievance. You know that's the case because the only people marching in the streets about it are our competitors, not customers.

* On the Government's expected response:
The Government is way too smart to do anything dumb here.

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