KEY POINTS:
One of the most revealing things to emerge from Telecom head Theresa Gattung's farewell interviews was that she regards people she doesn't like as communists.
Strewth. But then again thinking before you blurt was never one of Gattung's strong points. The "very down-to-earth Kiwi sheila" liked to be blunt. It was her trademark - calling a spade a bloody shovel. The communists called it the Gattung gaffe. The rabid communists called it the gauche Gattung gaffe.
Her most famous blunder was in March last year. She said when it came to pricing, it was fine for telcos to use confusion as their chief marketing tool and added that confusion was what helped telcos keep calling prices up and high-margin revenues ticking along nicely. Then she dug a little deeper. "At some level, whether they consciously articulate it or not, customers know that's what the game has been. They know we're not being straight up."
Brilliant. Telcos deceive their customers to keep their prices and margins up and the customers know they're liars. It was probably the most insightful thought Gattung had because it encapsulated her biggest failing as chief executive - the failure to keep her customers happy
It was something she belatedly realised last year when she said Telecom had to "re-engage with the hearts and minds of ordinary New Zealanders". Still in hindsight, she wished she had done better. Yet despite such an abject failure that has done immeasurable damage to the Telecom brand, Gattung tells us she has no regrets. She did the best she could. But her legacy speaks for itself.
Thanks to gross underinvestment, Telecom's broadband service is appalling - one of the slowest and most expensive among OECD countries. In 2000, shortly after Gattung took over the reins, Telecom shareholders' equity was $2.16 billion. At the third quarter result this year shareholders' equity was $1.38 billion - a decline of 36 per cent. Over the period of her tenure, Telecom's share price declined 42 per cent. Plus there's the still unresolved problem of a disastrous investment in Australia. Not to mention picking the wrong horse in mobile phone technology. We know customers are unhappy, shareholders should be too.
Some of these troubles were outside Gattung's control, but a dynamic chief executive might have seen what was happening a lot earlier and would have also paid attention to the writing on the wall with Government regulation. She was well aware of the risk. It was spelled out by her advisers at the same briefing where she made her famous gaffe. Once again she didn't think, telling the assembled: "Personally, my view would be that the Government is way too smart to do anything dumb here." A month later, it was her analysis that looked way too dumb.
Gattung came up blank also on the difficult problem facing all telcos - how to make a profitable business when traditional revenues are taken away by almost-free calls via the internet. Gattung blathered about the next generation network, but delivered nothing. She never had a plan B. She never looked ahead and made strategic decisions.
And let's face it she never really had to. Right from the start her role, as ordained by her predecessor Rod Deane was not to think. Do as Rod says. Or better still, don't do anything - the monopoly will take care of itself. Gattung sleepwalked through her tenure as Dean's puppet. Putting a woman in the top job - a loud, brash one fluent in marketingspeak - was Dean's masterstroke. Gattung was the perfect distraction while the monopoly went about its anticompetitive ways.
In the end Gattung calling her critics communists could be seen as projection. When you think about it, there's not much difference between a communist and monopolist. Both exert their will on the people with an iron fist. Both make sure a minority prosper at the majority's expense. Both are heartless in their disdain for what the people want or need. Farewell comrade Theresa, you were a loyal servant to the monopoly.
