CallPlus pair say let's split

New Zealand's third-biggest telecommunications company, CallPlus, is splitting up in more ways than one.

The company's husband-and-wife co-founders, Malcolm Dick and Annette Presley, have separated and Dick said yesterday a split of the company this year was also on the cards.

"It's going to move in the direction of a wholesale operator and a retail operator," he said. "It's pretty much what we're suggesting Telecom should do."

Dick and Presley started CallPlus in 1996 and its internet service provider arm, Slingshot, in 1999. Slingshot, which has been Presley's focus, has primarily been an ISP for residential customers while CallPlus has catered to small and medium businesses. Slingshot had about 20,000 broadband customers with the two companies combining for a total of 130,000 and an annual turnover of $70 million, Dick said.

The division between the companies would become more pronounced over time as CallPlus rolled out networks, he said. CallPlus has earmarked between $200 million and $300 million for building infrastructure. Much of it is likely to be spent on wireless WiMax broadband, with some potentially going to equipment for local-loop unbundling once Telecom's network is opened up next year.

Dick said Slingshot would then be treated as just another CallPlus customer. He and Presley insisted there was no animosity between them and it would be business as usual for both companies.

"[The personal split] means nothing. Things will continue as they have," Presley said. "From the day we met, we went into business together. We have always been in business together. We don't tend to have emotional moments at work."

CallPlus chief executive Martin Wylie would continue with the day-to-day business of running the company. Dick and Presley would continue in their respective strategic and marketing roles, and as primary shareholders of the company. Presley holds 5.8 million of CallPlus's total 12.9 million shares, while Dick owns 5.5 million.

The three will also continue as the company's directors.

But observers yesterday speculated there was acrimony between the co-founders, and that Dick had asked Presley to buy him out of the company.

Observers also suggested that Dick's desire to split the company despite CallPlus not having much of an existing wholesale business was further evidence of animosity. Dick dismissed the rumours as untrue.

Previous to founding CallPlus, Dick and Presley started Call Australia in 1992. The couple built the company's revenue to $100 million a year, then sold it in 1998 and returned to New Zealand. Dick said he and Presley had done the wholesale-retail split with Call Australia and that it was a sensible model.

"It's pretty much the model Freightways followed 15 years ago, what we did ourselves when we were in Australia. We ended up with six or seven retail companies and one wholesale company, which sold the services to them and they sold them to the customers."