Customer key for telco heads

New telecommunications industry bosses Allan Freeth from TelstraClear and Russell Stanners from Vodafone found a common theme in targeting the customer at the sixth Telecommunication and ICT Summit in Auckland yesterday.

Four months after getting the TelstraClear top job, chief executive Freeth finally broke his silence on where he sees the industry and his company headed.

He used the conference to speak about the dangers of industry arrogance, developing a messiah complex, internet piracy and the future of TelstraClear.

Freeth said he was initially struck by the arrogance and self-importance the industry displayed.

"What we are about is phones and computers. It's not world peace, and it's certainly not a cure for cancer."

He warned the industry against a "we-know-best" mentality and underestimating the power of consumers to set the technological agenda.

"It is hard to determine the point that such market responsiveness is transcended by the belief in one's own commercial and moral authority, but in my opinion we as an industry are either dangerously close to it, or have long since gone past it."

TelstraClear had been guilty of a "messiah syndrome" and "lost our way a little," but under his watch the customer would come first, he said.

Internet piracy and illegal reproduction of music and movies were examples of how the industry had to adapt to marketplace realities.

Freeth did not condone such activity, but described any hope of stopping them as "fanciful".

"The companies that will survive this changing paradigm, this stranglehold of the mass market's invisible hand, will be the ones who can change their business models to be part of this system," he said. "Those who fight it will lose."

He said the domestic telco industry should be particularly concerned about internet telephony company Skype, whose calls cost about 3 cents a minute.

He added Skype would likely target the corporate market and branch out into video conferencing, data collection and mobile wireless calls.

In the long run the companies that survived would have transformed their traditional business models, he said.

"Like the tide, the clock can't be wound back, and the reality of the internet is that the die is cast."

Freeth said TelstraClear had been portrayed as the champion of market efficiency in its regulatory battles, but he did not see this as his primary battle.

"I am not here to solve the industry's problems, nor is it my job to improve New Zealand's regulatory environment for telecommunications," he said.

"If there is one message that I have been bringing to staff at TelstraClear, it is that our existence begins and ends with the customer."

Stanners, who took office as Vodafone's managing director in February, also focused on the customer.

Half of office workers spent 30 per cent of their time away from their desks, he said, and over the past 20 years technology had focused on delivering productivity gains to the desk, but future gains would come from helping the individual to work on the move.

"Just think about what that means. It's a fundamental paradigm shift in terms of how you deliver business processes."

Stanners said the shift would not change business processes, but take them out of the office and deliver them to staff on the move.

Away from the office, Stanners said, technological change and third-generation networks would deliver mobile television, full music track downloads and video calling.