CallPlus aims to be among top three NZ telcos

Mark Callander, chief executive of CallPlus, says there will be challenges to overcome in taking over TelstraClear's number three spot. Photo / Brett Phibbs

Expect to hear more noise from telco CallPlus - it has its eye on knocking TelstraClear off its number three position in the phone and internet market.

Just three months into the job, CallPlus chief executive Mark Callander is promising the company behind the Slingshot brand will not sit back and be a "me too" phone and internet company, but will try to lead the way on innovative products and services.

He describes himself as a challenger at heart and competitive by nature but acknowledges there are "some pretty big mountains" to climb to get to the number three spot behind Telecom and Vodafone.

Callander acknowledges that TelstraClear has had a revival in the market on the back of an aggressive advertising campaign but he said the Slingshot/CallPlus brands could be a serious competitor in the next few years.

The company is looking to grow its roughly 10 per cent of market share and be the telco of choice for people looking to leave Telecom or Vodafone.

Slingshot has just secured the Sky broadcast sponsorship for the NPC rugby competition as part of a strategy to position itself as a leading tier-two telco.

"If you look at when Vodafone first came into the market years ago when they were young, sponsorship was one of their key strategies to try and build awareness.

"I think Slingshot is at that point where it is sitting at 10 per cent market share but to really propel itself to the next level it has to start increasing brand awareness, it has to go down a more traditional awareness building path and this is our first foray into the sponsorship market."

Callander is the second chief executive of CallPlus after co-founder Annette Presley was dumped from the role.

He replaces Martin Wylie, who left last year to join Opto Network, a fibre network and wireless infrastructure provider.

Slingshot is this month set to join Vodafone, Orcon and TelstraClear in serving customers from its own equipment in Telecom's exchanges - local loop unbundling (LLU) - with technology up and running in eight Hamilton exchanges.

It is a change of direction for the company that has, up until now, on-sold phone and internet services from other network providers.

Last week the company signed an agreement with Orcon and Compass to share access to each other's unbundled networks.

As each player unbundles an exchange - Orcon are now in 40 in Auckland and two exchanges in Wellington and Compass has unbundled two in Christchurch - the service will be offered to customers of the other companies.

"We will probably be the largest LLU builder over the next 12 to 18 months," said Callander.

He would not be drawn on how much it would cost.

But Vodafone spent $50 million in 2008 building its Auckland-based "Red Network" and TelstraClear last year spent $25 million on unbundling in around 60 exchanges nationwide.

Callander said the company has sufficient scale in terms of customer numbers to justify unbundling more than 50 exchanges outside of Auckland.

An existing relationship with Vodafone in Auckland sees around 9000 Slingshot customers accessing phone and internet services through Vodafone's Red Network.

Wholesale deals such as these ensure the investment decision stacks up, said Callander, and CallPlus has had preliminary talks with Compass Communications and Orcon regarding a shared (LLU) network.

Funding for the build will come from the company coffers but investors are also likely to be tapped for cash to fast-track the programme.

Local loop unbundling runs over traditional copper-line technology from the exchange to customer households but Callander is certain there are still opportunities despite Government plans to back an ultra-fast broadband network based on fibre technology.

"One of the lessons we've learnt over the years is you can't wait for things to happen.

"I think if we sat back and waited for ultra-fast broadband (UFB) or sat back and waited for regulation I don't think we'd be around today," said Callander.

He said fibre-based high speed broadband could be more than five years away and the reasonably quick payback timeframe on local loop unbundling still made it worth doing.

"We have a clear path of where we need to get to.

"We need to increase profitability across our business. The only way we're going to do that is to migrate customers to our own network," Callander said.

It is not just about improving margins. Having its own network means it can offer innovations such as 50 smartphone features, including call minder or call forwarding, for free.

WiMAX wireless technology that the company has set up in Whangarei is still part of the company's plans for the Auckland market, Callander said.

"We have a pretty clear vision as to where we need to get to.

"There are different paths that are going to get us there and we don't know which path is going to be the winner at this point, but we've certainly got plenty of options."

Its business-focused arm, CallPlus, is now headed by former Vodafone manager Kelvin Hussey.

The company's size means the two business units, Slingshot and CallPlus, will now operate as stand-alone businesses.

A head for Slingshot is in the process of being appointed and the company is also on the hunt for an independent director.

The company rounded out its product offerings last year with a mobile deal piggybacking on Vodafone's network which now has 5000 customers.

MARK CALLANDER

CallPlus chief executive.

Age: 36.
Education: Bachelor of Management Studies, University of Waikato.
Career: Worked in the grocery business, for Telecom and ran own marketing company before holding senior roles for CallPlus since 2004.
Family: Married with three children.