Scepticism greets fair-play pledge

Russell Stanners of Vodafone (left), Theresa Gattung and Michael Boggs of TelstraClear. Picture / Mark Mitchell

Telecom chief executive Theresa Gattung yesterday made a firm commitment in front of a sceptical crowd about adopting a new, pro-competition attitude.

"I am here to tell you in no uncertain terms, we get it," she told a Telecommunications Users Association conference in Wellington. "We know there is broad public support for these moves."

Gattung was clearly reeling two weeks ago at Telecom's third-quarter earnings announcement, which took place two days after the Government announced a mammoth regulatory package designed to break the company's telephone and internet monopoly.

The Government said it would open Telecom's network to competitors, force it to split phone lines from broadband and impose accounting separation on the company.

But the normally buoyant chief executive seemed to be back to her old self yesterday in promising the company's acceptance of the Government's plans. Using bold language, she said that Telecom's obstructiveness was a thing of the past.

"We are not arguing to turn back time. We are not going to be obstructive. We are not going to mount any rearguard actions. We are not going to fight old regulatory battles. We are not going to hide behind legalistic arguments." Despite the firm commitments, Telecom's competitors dismissed Gattung's promises as lip service.

CallPlus founder Malcolm Dick asked her during a panel session whether Telecom would drop its opposition to an application his company had with the Commerce Commission for better terms on wholesale broadband.

Telecom has been arguing against granting CallPlus, along with fellow internet service provider ihug, unconstrained bitstream access, which would see broadband download speeds of up to 7.6 megabits per second.

Gattung said she had not been briefed on the application and had no further comment.

Dick said her refusal to comment was proof that her promises were empty.

"She knows all about this issue," he said.

Ihug regulatory affairs general manager David Diprose was also sceptical.

"The proof of the genuineness of Telecom's apparent change of heart will be in what we see next from them. Will they continue to challenge the current UBS determination?"

Industry analysts were sceptical but willing to let Telecom show it was serious.

"This is now really on the record, so we have to give her the benefit of the doubt for the next few weeks or months or so," said Sydney-based telecommunications analyst Paul Budde.

"Some of the disputes that are happening between Telecom and the industry need to be resolved now, really in the next few weeks. If she starts delivering on that sort of promise, then we can sit back and relax a little bit."

Gattung acknowledged the scepticism in her speech and said the promises were not just window dressing.

"Judge us by the evidence. Judge us by the changes you see." she said.

Telecom shares closed up 17c to $4.67.

Theresa Gattung's pledge:

* We will play by the new rules. We will be open. We will be true to our word.

* And we will be doing our absolute utmost to optimise and harmonise the needs of all customers, shareholders, regulators, competitors and New Zealanders.

* This is the start of our new way of life.