Richard Inder: New dawn proves to be, well, rather underwhelming

Wouldn't it be great if we could feel great about Telecom?

Wouldn't it be great if the national operator was fleet of foot and innovative; if we could count on it for fast, reasonably priced services?

For one it would give journalists something fresh to write about.

I, and I suspect many other journalists, are sick to death of writing the same story - the company's obfuscation of the regulatory issues, its dissimulation about its performance and the hollow and dreadfully empty promises.

Yesterday was supposed to be the day that the new chairman, Wayne Boyd, would put his stamp on the strategy of the company. It was also the day for chief executive Theresa Gattung to reclaim the reins.

Coming three months after it emerged the Government had decided to take a big stick to the company, investors also anticipated compelling evidence that it had got the message.

Boyd and Gattung had themselves almost promised as much. But they underwhelmed.

The results were far from stellar. Operating profits - stripping out the effects of the $1.2 billion writedown at the Australian operation AAPT - were in line with market expectations at $1.49 billion.

Revenue was up, by a modest 1.9 per cent, but expenses soared 4 per cent to $3.6 billion. Much of this was due to increases in labour costs and rising costs at its internet and directories businesses.

The future does not look that bright either, with earnings to 2010 forecast to remain flat on where they are now.

Telecom has agreed to boost capital expenditure.

But at just $50 million extra in the current year to $800 million, it is not the sort of step up that will make a difference to the quality of service.

Nor is it the sort of investment that will drive a huge increase in usage and the expansion of the market.

The disclosure on number portability is a case in point.

Telecommunications companies in most of the developed world long ago made this facility - which allows customers to keep their phone numbers when they change providers - available to their customers.

But Telecom has decided that this, the most simple of services, will not be made available until next year at the earliest. The punishment of unbundling - imposed because Telecom had frozen out competitors - seems to have been forgotten.

Telecom added little detail to its much-vaunted separation plans.

And - as I have noted in this column before - its version of separation, which does not go as far as the highly praised moves by the UK's BT Group, leaves it exposed to further regulation by the Government.

It did promise to grow broadband use, roll-out more quickly the next generation high-speed internet backbone and encourage the development of new services such as internet telephony.

But these still seem like soft targets the company had in the pipeline before the Government got the stick out.

In short, Telecom does not look like a story to get the blood racing and this is a shame for a company that has so much potential.