KEY POINTS:
I'm not sure if Telecom chairman Wayne Boyd is capable of the subterfuge that might have orchestrated a call (even via a conduit) suggesting that New York "vulture fund" boss Paul Singer get his guys at Elliott International to challenge the barking mad proposal to "operationally separate" the
national telco.
Or was Elliott International's Hong Kong-based, uber-gofer James Smith simply, in a fit of pique, acting on his own accord when confronted with Telecom's dismal operating profit?
Whatever the choreography behind Elliott International's push for two "independent directors" (of its choosing) to be voted on to Telecom's board, it's certainly an opportune time to reconsider things.
For instance, why is Telecom allowing itself to be pushed by the Labour Government into the so-called operational separation (that only a year ago Boyd described as "unworkable"), when it should be taking the opportunity presented by a potential change of Government to push for the structural separation option it has favoured all along?
Eight days ago Telecom announced its annual operating profit from continuing operations had fallen 15.5 per cent to $713 million.
Elliott International did not waste much time before announcing that it had nominated two directors - Mark Tume and Mark Cross - for potential election as directors at the company's October AGM.
Or before directing shareholders to its submission on the Ministry of Economic Development's (MED) website, which expanded on the economic philosophy behind its proposal.
Since then the usual suspects - including the Telecom board (not surprisingly seeing the current Government is still in place) - have come up with all sorts of excuses why the telco should not be deflected from carrying out a strategy, which it believes is "unworkable"- but which was enforced on it by Communications Minister David Cunliffe's boffins.
There's the $1 billion or so that might already have been expended on carrying out Cunliffe's dream, and the nostrum that Telecom chief executive Paul Reynolds must be given time to make the Government's scenario work before pursuing full separation.
But this is nonsense.
Frankly, Telecom is not the only game in town.
If the telco would rather somebody else - aka the Government or a club membership - take ownership of the wholesale functions, the structural separation could be settled by a Crown cheque.
This is only the honourable commercial course to pursue rather than expecting Telecom to try to make operational a structure that it has already advised is "unworkable", and then end up having to go down the full structural separation route when it becomes abundantly obvious that the Government-enforced plan hasn't worked.
It's an unfortunate upshot of the Kiwi business psyche that companies spend far too long on pursuing the wrong strategy out of the misguided belief that the guy in charge - in this case British Telecom (BT) import Paul Reynolds - needs to be given time to prove himself (or herself) by trying to extract success from a model forced on the company by outside forces.
It's an interesting point that the Elliott International submission to the MED does take issue with the operational results that BT achieved against expectations. BT, in fact, did undershoot.
The National Party's $1.5b broadband strategy is geared to ensuring Kiwi households are plugged into the Internet at broadband speeds.
But the details of what should happen with Telecom are alarmingly thin.
A sensible strategy might entail increasing internet connection speeds and bandwidth along with ensuring competition across multiple platforms, investment in next-generation technologies and addressing market failures.
Elliott International's broadside presents New Zealand with a unique opportunity to consider the real issues instead of going further down a path clouded by the current Government's dictate and shareholder sentiment.
It's worth standing back and thinking through the consequences of Smith's (aka Singer's) prescription. Other nations are doing exactly that.
