KEY POINTS:
It was possibly the most important year in the history of Telecom, with 2007 signalling the end of the old regime and the start of a new world - one where rivals use Telecom equipment to try to steal its customers.
Done well, Telecom may thrive in this environment, spending less time lobbying politicians and more time actually rolling out advanced communications technology.
New chief executive Paul Reynolds told the Herald on Sunday better choice and more players in the market can only be a good thing - customers will choose Telecom not because it's the only game in town, but because it's the best.
"I think Telecom needs to win its customers and win the right to serve those customers - and choice shatters the whole market," says Reynolds.
"I think it will create a more mature market - customers feel they have choice and are more relaxed therefore about the position of communications in the marketplace - that is very important.
"It might seem paradoxical, but I believe that Telecom will flourish - and become a stronger and better organisation as a result of that choice.
"If there's not much to compare it to, then people often think worse of it than they otherwise would do.
"And I think that we will deserve a strong place in that market and will deserve the loyalty of our customers."
Asked about the biggest challenge Telecom will face this year, Reynolds says it'll be the battle to put customers first - and he aims to have senior managers rewarded on the basis of improved customer satisfaction.
But that's not all the giant telco will have to get right.
It's the year Telecom is broken into three operating units starting March 31 - retail, wholesale and network - in a bid to boost competition, and it will also start work on its new high-speed broadband network.
"There's some big regulatory changes and we've committed to some significant goals. In particular we've committed to building a fast broadband network - that I think has the widest reach in the world."
This $1.4 billion plan for high- speed broadband is a commitment to deliver speeds of up to 20mbps to towns with 500 or more lines over the next four years.
Another aim for this year is a con-tinued reduction in the kind of disputes and litigation between rivals that have dominated the sector.
"I have come to this job having a lot of experience of the wholesale market in the UK and it teaches you one thing - as all industries mature, and the telecoms industry has to mature a bit here, you learn that other organisations in the marketplace can be your partners for some sets of customers, competitor for another and a customer for another part of the marketplace. In mature industries, you learn to deal with that."
He cites oil as an industry where sometimes partners are also rivals. One company might build a refinery, for example, which then supplies all the petrol stations in a region - including those competing with its retail arm.
"The telecommunications industry is going that way and I want to accelerate the speed we mature in that way," he says.
InternetNZ executive director Keith Davidson sees some significant changes for New Zealand consumers.
While new rivals in the local loop unbundling environment can now offer better competition to Telecom's services, anyone thinking prices will start tumbling may be surprised.
"I think customers are all getting a bit more sophisticated and there's a value-for-money proposition as well - that cheap doesn't always mean good," says Davidson.
The key for him is that, while New Zealand has a much-more level playing field now, "there's still an 800- pound gorilla on the field".
"Even though there's a change of guard [at Telecom], I still think they will be protective of their patch and looking to maintain their dominant position. Historically, Telecom has believed they have to control your account from end to end.
"Telecom potentially has a much greater ability to earn income by letting other companies use its network and charging rentals."
Telecom Users' Association of New Zealand chief executive Ernie Newman says progress last year was at the upper end of expectations.
"There's been a tremendous amount of work done that will change the character of the industry forever."
When it comes to opening up its network to rival equipment, Newman gives Telecom top marks.
"Telecom has not dragged its feet, it's been exemplary in its behaviour, there have been a few glitches and a few communications issues. [But] in the main they've been positive."
On the issue of operational separation, Newman again has good words for Telecom under Reynolds, which "appears to have accepted quite positively the concept".
Telecom's rivals have in general, says Newman, "a grudging acceptance that the playing field is a lot more level than it's ever been before. And now is the time to get out there and start doing serious business. I think they're well-placed to do it."
