Job review as Telecom cuts costs

RICHARD BRADDELL finds out that contractors will have a bigger role in the group's future

Telecom expects to save "tens of millions of dollars" from a push to outsource its middle level network maintenance and support.

Rumours have been rife that Telecom is trawling through its operations looking for serious cost savings to support its Australian expansion.

Telecom's general manager of network delivery, Simon Moutter, said the review of network operations was just another step in the business improvement programme the company had been involved in for many years.

The use of the expected savings would be a corporate decision to be made by chief executive Theresa Gattung and others, he said.

"I'm sure they are going to put it to damned good use in growing Telecom, whether it's in Australia or somewhere else."

Mr Moutter said Telecom was in the early stages of a staff consultation process that would result in some redundancies.

He expected that on past form those displaced would find jobs with Telecom suppliers or with other telcos.

He rejected suggestions that the restructuring might compromise the performance of the company's network.

He said there had been a 50 per cent reduction in network outages and an improvement in Telecom's already high level of customer satisfaction over the past year.

The present project was simply a continuation of Telecom's ongoing effort to improve technology and service, while also reducing its costs.

"Certainly at this time we are proposing a number of changes around how we operate our network."

He said the changes would involve staff reductions.

These would include changes in the staff numbers working at the network's nerve centre in Hamilton.

But increased automation and outsourcing would more than compensate for these changes, he said.

The network would continue to be monitored 24 hours a day.

At the heart of the current proposals was a drive to outsource more activities, which was an international trend.

He said the work being undertaken by telecommunications companies was becoming more specific and intense and it no longer had the same level of need for "Jack of all trades" people.

"Our feeling at this point is that vendors are probably better equipped to do a lot of middle-level maintenance and support and we are moving up to a much higher value added integrator and service manager role."

Asked whether the initiatives would involve a cutback on rural maintenance, he said there was nothing in the process that differentiated between rural and city services.

He said that Telecom was working towards the complete replacement of its exchange switches with packet-switched technology.

"We are not investing in new switches anywhere at the moment because we are waiting for this next generation of technology to become economic and to be well-proven before we implement it here, which is a year or two away.

"I can guarantee in terms of service levels that we have been putting in a huge amount of effort in the past year to improve the performance and the reliability of all our switches."