KEY POINTS:
TelstraClear announced a $7.5 million profit last month, a turnaround on the $28 million loss a year ago.
The change in fortune has clearly put chief executive Allan Freeth into a celebratory frame of mind. This week he invited 500 of his closest friends and business associates to a lunchtime party at Vector Arena.
There were laser lights, live music, acrobatic BMX riders and daredevil motorcyclists. And there were holograms.
Top Australian comedic talent Rove McManus beamed in live, life-sized and animated from Melbourne in what was dubbed the first transtasman holographic transmission of its type.
And - because it was Rove - there was another first: Freeth became the first CEO to have his bottom patted on stage by a hologram.
Also appearing in holographic form - but this time prerecorded - was Freeth's boss, Telstra chief Sol Trujillo. During the Sol-ogram, Trujillo reminded the Auckland crowd of the mothership Aussie telco's reach back across to this side of the Tasman via its TelstraClear subsidiary; 38 of Telstra's top 50 customers link across the ditch using TelstraClear's newly christened "Next IP" network.
Apart from the name, TelstraClear's Next IP network is not new. It is the national infrastructure the company has built up over the past decade.
After the event Freeth told Interrupt that after spending the first two years in the top job building a solid foundation for the company, this year was about embracing competition and going for market share growth. The company does indeed seem to have a new lease on life, which is good news because the country needs strong challengers in the telecommunications industry.
There are interesting times in the telco competition space as the ramifications of the unbundling of the local loop begin to crystallise.
Freeth says TelstraClear has taken its time to decide its approach to unbundling, but now he is talking boldly about the company's plans in this area, which he says include going into exchanges outside the main centres.
Back in Auckland, unbundling gives TelstraClear an opportunity to make up ground it has lost because it does not have the type of residential cable network it enjoys in Wellington and Christchurch.
"Until the Government unbundled the local loop, we were reliant on Telecom selling us services to reach those customers and that was clearly unsatisfactory," Freeth says.
"With unbundling it's like that network is ours, so everything changes."
Freeth raised eyebrows this month when he criticised the National Party's $1.5 billion plan to build a nationwide fibre-optic network, saying such a network would not enhance the country's productivity.
The comments were perceived by some as a sour-grapes and patch-defending reaction from a company whose network was under threat from a potential Government-funded competitive infrastructure.
Freeth says the reactions to the comments did not surprise him and "it's not sour grapes".
"At the end of the day Governments do what Governments want to do, but what we tried to say is understand the investment signals that sends.
"If you want a company like Telstra or Vodafone to be in this country and invest, then they need to make an adequate return, and if you guys are going to overbuild our network with public money, then think about what that will do for investment."
TelstraClear is also putting on the pressure in the consumer mobile phone space, generating a lot of publicity with a cheap mobile calling rate for customers who bundle mobile services with its other products.
Freeth says interest in the offer has been strong, with 300 to 400 customers signing on each day soon after launch.
Offering that type of bundled deal is a powerful competitive weapon if TelstraClear can put compelling packages together.
As Freeth says: "That's what we do. We're a challenger, but we're a mature challenger. We have to find the soft spots and we exploit those."
