Clear targets business market in online attack

By Richard Braddell

WELLINGTON - Clear Communications is to renew its attack on the corporate market with the aim of becoming the leading online supplier of telecommunications to business.

Chief executive Tim Cullinane said Clear's residential business, which is dependent on Telecom for customer access, would be of secondary importance to the business market, where it plans to extend its access by rolling out more fibre optic cable and through development of LMDS radio links.

Mr Cullinane said that telecommunications companies would have to have implement online strategies if they want to be around in five years.

Clear would pursue a strategy developed with the help of British Telecom over the last six to eight months which would involve British Telecom injecting more capital for network expansion that would give it direct access to more business customers, he said.

On Friday, British Telecom ended a debilitating impasse over Clear's ownership when it announced it was moving to total control from the 25 per cent it has held for the last three-and-ahalf years.

The move to full control is unusual as the British telecommunications giant normally takes joint venture positions in other countries with the aim of channelling traffic to its international network.

But Clear executives were jubilant on Friday when the investment was announced, since the commitment gives the company much-needed muscle to tough it out in an increasingly difficult marketplace.

In addition to capital, British Telecom will be playing a larger role in providing business and technical expertise as well as access to the international market and its products and services.

But while British Telecom was one of the early developers of ADSL, the bandwidth technology which telcos such as Telecom are using to stretch the carrying capacity of copper wire, Mr Cullinane said Clear would be unlikely to want that expertise unless it could get cost based access to Telecom's local network.

Indeed, Clear's new strategy is based upon concentrating on market segments where it has direct access to customers through its own facilities.

That obviously does not extend to Clear's residential toll business, although Mr Cullinane did not elaborate on the extent that would be allowed to wither on the vine.

"The residential market will continue to be an important part of our business, but the focus will be on business and Government customers," he said.

But he said light handed regulation, with feather fingered enforcement, reinforced Telecom's domination of the "last mile" and made it difficult for companies like Clear to offer services profitably to residential customers.

With regard to the row over local Internet connection charges, Mr Cullinane said it was extraordinary that Telecom had the market power to be able to unilaterally impose charges to force subscribers on to the free 0867 access code.

Clear, which stands to lose possibly tens of millions of dollars in interconnection revenue from Telecom's move, is in an awkward position since it is in court arguing that its interconnection agreement does not exist because it is illegal.