Telco keen for 'disrupter' tag

By PAUL BRISLEN

This is a crunch year for Telecom's Australian subsidiary AAPT, according to chief executive Jon Stretch.

Stretch has been in the hot seat since September last year.

He said AAPT had come through a period of consolidation and wanted to finally be seen to add value to Telecom's financials.

"It's fair to say AAPT has not added a lot to the group's numbers yet, so if we can do that in the next year then everyone will be happy."

Stretch has the task of making Australia's number-three network operator stand out despite being a long way behind Telstra and Optus in market share.

However, he sees that as an advantage rather than a problem.

"We don't think of ourselves as number three, similar to the other two but smaller. AAPT was one of the first competitors and we've always had that 'keeping the bastards honest' image that has stuck."

Stretch wants to develop more of the products and services that disrupt the market, such as the plan that allows residential customers to make unlimited long-distance calls or international calls to five countries for A$59 a month.

Stretch said that in the quarter since adding the product to AAPT's line-up, the company had added 24,000 residential customers, a market segment where it had seen hardly any movement for a long time.

"That's a jump of 5 per cent and that's good in anybody's books. But we didn't do that by offering a "me too" product only cheaper, we went for a disruptive product."

That disruptive philosophy extends also to the business market, where AAPT is aggressively tackling the small to medium-enterprise space with its voice over IP (VoIP) product offering.

Companies with between 10 and 250 staff can buy a packaged offering that gives every user a phone, phone number, smart phone services, email address, unified message centre that combines voice and email in boxes and a range of other services for $150 per user per month.

"That's the sort of thing that will make the competitors sit up and take notice and start to think about the market."

AAPT's period of consolidation is behind it but Stretch said having one quarter with healthy returns wasn't enough and he would be looking for a run of seven or eight quarters to really be happy.

"The key words here are incremental steps for the next year at least.

"Companies that make giant leaps tend to leave something behind and that bites them if they're not careful," he said.

Stretch doesn't rule out "getting a quick boost" through an acquisition in the next couple of years if the opportunity presents itself, but for now he's taking the steady-as-she-goes line.

"You've got to get it in good shape before you go turbo-boosting the business."