KEY POINTS:
Telecom's new chief executive, Paul Reynolds, has made a positive first impression with the vim and vigour he exudes in front of the TV cameras and his enthusing about the company's determination to deliver customers the broadband service they have been crying out for.
Reynolds' predecessor, Theresa Gattung,
certainly displayed her own form of high-level dynamism, but the fresh can-do message Reynolds is plugging is encouraging for the future of telecommunications in this country.
Obviously he needs to deliver on the rhetoric, but at least the vision he is painting - of a world-class broadband infrastructure being vital for New Zealand - is what consumers and businesses want to hear.
Reynolds' pronouncement last week that the company was committed to spending $1.4 billion over the next four to five years taking its "next generation" high-speed broadband network to every town with 500 phone lines was great PR.
Those who thought the $1.4 billion figure sounded familiar would be right.
Telecom said in March last year it would spend that sum transforming its network. It then went a bit quiet on its plans when the Government, in May last year, walloped it with the news that it would legislate away the company's network monopoly through local loop unbundling.
The Government has also imposed operational separation on the telco, further cutting its powers.
Whereas Gattung's response last year was to threaten to reduce its infrastructure investment because the Government wasn't playing nicely, Reynolds - fresh out of operationally-separated UK telco BT - appears to be bubbling with enthusiasm over the challenges ahead.
"Operational separation has given Telecom the opportunity to re-plan its broadband strategy and accelerate the upgrade of the existing network in ways that will support New Zealanders' aspirations for the digital age," he said in a statement last week.
David Kennedy, research director at research consultancy Ovum, admitted to being "a little surprised" at the timing of Reynolds' comments given the company is still awaiting final details such as the pricing regime it will be subjected to under the new unbundled/separated environment.
"My interpretation is that Reynolds is trying to get the company back on the front foot, get it focused back on the market," Kennedy said.
"There's been a lot of focus in the past 12 months on regulation, a number of management changes, and there's a danger here that the company could become inward-looking and I think he's determined to make sure that won't happen."
With Telecom set to announce what is expected to be an unimpressive quarterly result tomorrow, last week's PR offensive was also a chance for a pre-emptive positive news assault.
Tomorrow's result will show a drop in revenue and profit, the latest testament to the aging business model that is afflicting traditional telcos the world over as their core calling revenue erodes.
The latest instalment of a twice-yearly embarrassment for Telecom is also due to hit the headlines this week - the release of OECD country rankings of broadband penetration.
New Zealand is expected to remain wallowing below 20th place.
The OECD figures will give Telecom's critics the opportunity to attack Reynolds with a valid question: whether his $1.4 billion cap-ex budget (less than $300 million a year over the five-year time frame he has set out) is anywhere near enough to pull this country up the broadband ranks.
Ovum's Kennedy, however, says the $1.4 billion investment figure is comparable to what telcos in other countries are spending on their networks.
Given Telecom's high-speed broadband expansion project is a fairly labour-intensive operation and covers the length of the country, the company would be hard-pressed to find the skilled workforce to do the job any faster even if it did throw more cash at the project, he says.
Reynolds said last week Telecom would run "like greyhounds out of the gate and get the job done" within four years.
He will be well aware that he is talking to a cynical and jaded customer base who will want to see some tangible progress from the new Telecom regime well before then.
As Kennedy puts it: "The real test will be whether this accelerated level of investment can be sustained into the future as the new competition regime in New Zealand bites, but this is a positive first step. Instead of sulking over the recent policy changes in New Zealand, [Telecom] has come out swinging."
