Stockbroker advises clients to swap Cabletalk shareholdings

By RICHARD PAMATATAU

Stockbroker ABN Amro Craig has advised customers to sell their stock in Cabletalk, one of four companies vying for lucrative Telecom maintenance contracts estimated to be worth $800 million over five years.

An email sent by ABN Amro's Mark Etheridge said he was "contacting his holders of Cabletalk to make sure they are aware of what is going on with the patch contract renew with Telecom."

Telecom has said it will halve the companies maintaining its network, reducing them to two.

A patch contractor maintains most of Telecom's equipment in a "patch" - geographical area - providing fault rectification, service restoration, deployment and maintenance.

The companies vying for the business are Alstom, Cabletalk, Downers and GDC.

In a contract document, "Request for Tender for Field Services", Telecom says it is looking for an exclusive relationship - suppliers are unable to work for TelstraClear or Vodafone.

It also reserves the right to change any date, time or other aspect of the RFT process as well as delete or change its requirements for any goods or service covered by the process.

The tender document expects the winning providers to reduce network faults by 5 per cent a year and, as a consequence of greater introduced efficiency, the sum paid to them also will be chopped annually by 5 per cent.

It expects respondents to list existing telecommunications clients and detail how they would manage being awarded an exclusive contract with Telecom.

Cabletalk subsidiary Astute Networks recently landed a maintenance deal with TelstraClear, but that contract allows it to do work for other telecommunications companies.

In the email, Etheridge said the "likely future contractors based on the information we have will be GDC and Downers".

For that reason he is advising that customers consider "selling out of Cabletalk and putting the money into GDC".

Stephen Fuller, Telecom general manager network delivery, said the company wanted to reduce the number of contractors from four to two so it could introduce greater efficiency to the service it offers customers.

"We want to reduce the variation in the field and have people working more efficiently to deliver our products and services," he said.

Telecom wanted exclusive relationships, he said, because it wanted commitment from its suppliers.

An irony there is that Telecom may have to consider the relationship Alstom has in Australia with rival Telstra.

Fuller said Telecom would work hard to make sure its contractors made all of the cultural changes to service customers better.

While Telecom wanted its contractors to look and feel like Telecom staff, down to uniforms, Fuller said it had no intention of taking the function in-house.

He said it would be much easier to look after just two contractors.

The company wanted end-to-end service and an efficient service provider would not be affected by Telecom's performance incentives.



Cabletalk general manager Peter Wilson would not comment on the ABN Amro email or Telecom's tender process.