Clear reshuffle driven by desire for growth

By RICHARD BRADDELL

New divisions created by the restructuring of Clear Communications may ultimately be spun off as separate companies.

Clear is creating four new customer-oriented business and six support groups.

Its main rival, Telecom, also announced a restructuring this week.

Clear chief executive Peter Kaliaropoulos said that while the move to create autonomous businesses would allow their sale, there was no current plan for this.

Mr Kaliaropoulos said the latest restructuring would enable Clear to achieve growth of between 20 and 25 per cent and an annual revenue of $500 million in two years.

A three-fold increase on this financial year's profit was expected in the 2002 year.

After suffering its first loss in the past financial year, Clear is trading profitably following an earlier reorganisation and a capital injection from owner British Telecom.

Mr Kaliaropoulos said the restructuring would enable Clear to act more quickly so that it could capitalise on opportunities.

The restructure involves the creation of four "profit and loss" units.

One of these, business solutions, will service corporate, Government and high-value customers who require face-to-face service.

The company's mass markets unit, on the other hand, will service customers who do not require personal service.

Clear will also offer wholesale services through another unit which, among other things, will sell bandwidth such as the capacity the company owns on the Southern Cross cable that connects New Zealand to North America.

The future of the fourth customer unit, wireless, depends on the outcome of the third generation mobile spectrum auction.

If Clear obtains spectrum in the auction it will look to build its own infrastructure within months.

Mr Kaliaropoulos said Clear could also become a "virtual" cellular player, by using other operators' infrastructure to deliver its own services or by forming an alliance with another player.

He said that at present, more resources should be devoted to mobility as this was the fastest growing area of the market.

He said no conclusions should be drawn from the present drawn-out status of the auction, in which Telecom was bidding for 15mHz and the other three players, Telstra Saturn, Vodafone and Clear, were each bidding for 10mHz of the 60mHz that was available.

Clear now regarded itself as being well down the track away from the traditional telco model and was instead offering intellectual property such as consultancy services to its clients.

The flattening of the management structure has done away with management directorates and this has caused two casualties.

One-time Telecom networks manager Ken Benson, who took the same job at Clear two years ago, will be leaving, as will the former sales director, Dr Ted Watson.

Mr Kaliaropoulos said there would be no redundancies given Clear's rapid growth. The company was hiring rather than shedding staff.

He was unable to offer any new information on British Telecom's plans to refocus on Western Europe and sell other non-core assets by December next year.

He said BT director Richard Slogrove, in New Zealand for a board meeting last week, had been unable to indicate if this plan included Clear.

Mr Kaliaropoulos said BT was asking if Clear could run any faster and was wanting the company to identify what its capital requirements would be for next year.