Mark Ratcliffe: Guardians with an eye on the future

Mark Ratcliffe says that in the rapidly changing telecommunication industry the biggest risk lies in not making any changes at all. Photo / Supplied

Opinion

The EPMU's Andrew Little recently gave his view on the changes to Chorus' service company relationships. As a union leader he naturally has his own view and we respect that.

Much of his viewpoint though, overlooks the huge structural, investment and technology developments in the telecommunications industry driving these changes.

Chorus is itself evidence of change. Operationally separated to be the standalone network arm of Telecom, we give all telecommunications providers equal access to the local access network. And because we are a standalone business, we focus on one thing - network performance, with none of the marketing or retail-related distractions Little refers to.

We see ourselves as guardians of New Zealand's fixed telecommunications network. As such we won't implement changes that would pose risk to the network that our customers - be they Telecom, Vodafone, Orcon, Actrix, TelstraClear or another service provider - rely on to deliver services to their business and residential customers.

Our service companies are integral to enhancing and maintaining that network. They're the ones who manage the technicians, jointers, dispatchers and other people who help us build and maintain it.

In recent years, Downer EDi Engineering and Transfield Services have provided this capability in regions around New Zealand. This kind of relationship is not new to our industry and it's not Telecom-specific - both companies also carry out work for other telecommunications businesses.

As a new business, Chorus was able to step back and realise that Telecom's historical service company relationships needed to evolve to better reflect recent and future changes to our industry. So, we looked at overseas trends and providers for new and better ways of operating.

We considered feedback that the standard contracts don't provide incentive to invest in the future, and that the funding model needed to change. Most importantly, our service provider customers demanded ever-better service levels.

So, we've made some changes. We've signed 10-year contracts with all our providers, worth a total of $3 billion. This gives everyone the confidence to make the right investments and efficiencies so they can benefit from long-term opportunities.

After a comprehensive selection process, we decided to continue our long-standing relationships with Downer and Transfield and introduce a third service company provider, Visionstream. We believe a three-provider model will bring innovative ideas to the industry and deliver great results for our customers and for the network.

Our customers want a service and network that performs better, not necessarily cheaper. They want more choice and flexibility so we need to work differently to provide that.

In a market with uncertainty, what is certain is that we have a massive workload with one of the largest network upgrades Telecom has ever undertaken.

We have proposed an innovative approach to the Government's broadband initiative. If our proposal is adopted, it will increase the workload even further and will naturally flow through to our service companies.

In an industry facing a skills shortage, our new contracts focus on giving the workforce more opportunities to develop and learn new skills, we've increased trainee funding to $1.5 million a year.

We also want to encourage innovation. While there has been a lot of debate about the owner-operator model, it isn't new to New Zealand and has been successful for utility operators, couriers and other service technicians.

It is recognised as delivering enhanced productivity and performance and gives owner-operators greater control over their working hours and income. To make things easier, Visionstream will manage back-end office logistics for owner-operators and provide extensive set-up support, as well as options for no upfront out-of-pocket costs.

Little concludes the sum of the changes being made will be a focus on quantity rather than quality. He misses the point.

Chorus' driving focus in reaching new service company agreements has been on getting things done right the first time, investing in long-term solutions rather than a quick fix, and ensuring that we live up to our role as New Zealand's trusted guardian of the fixed telecommunications network.

* Mark Ratcliffe is chief executive officer of Chorus, A Telecom New Zealand business.