Telstra's 'softy' who took a swipe at Spot the dog

By Richard Braddell

WELLINGTON - For most of his three-and-a-half years in New Zealand, Telstra's chief executive, Peter Williamson, has kept a clipping on his fridge in which Telecom's Dr Roderick Deane describes Australians as "a bunch of narrow-minded softies."

Maybe so. But Mr Williamson has demonstrated a competitive appetite that has gone well beyond the occasional boot of a half-sized soccer ball at a cardboard cutout of Telecom's mascot, Spot the dog, that he keeps in his office. During his time here, he has taken on Telecom and won some of its most prized customers, among them Fletcher Challenge, whose entire telecommunications business was handed over to Telstra's management late last year.

But for Mr Williamson, Dr Deane's welcoming comments went some way to confirming the trepidation he felt as an Australian setting up shop in New Zealand - it would be no easy matter, if only because he was Australian.

The reverse, he believes, will be true of the United States, where he will move next month to repeat the New Zealand start-up for Telstra in San Francisco. It is there that he will be hoping to emulate the success Telstra has experienced in targeting businesses from small to large with a package of total telecommunications management services. Telstra now boasts around a thousand business customers, with some suggestion that the Bank of New Zealand could soon join Fletcher Challenge as one if its major customers.

Telstra's performance has been impressive given that little more than two years ago it could reasonably have been asked: "Telstra - who?" At that point, the company was little more than smoke and mirrors. But a Wellington launching in April 1997 aimed at telling the world the company was in business quickly bore fruit, to the point that in its June 1998 financial year it demonstrated that it had become a solid business, generating a maiden profit of $338,000 on revenue of $39 million.

Mr Williamson describes Telstra's subdued first year as time spent understanding the culture and regulatory environment. Since then, the attack on the market has been characterised by down to earth pragmatism which has shamelessly relied on competitors' facilities to deliver services, unless investment of its own was clearly warranted.

"Rather than trying to build a Taj Mahal next to Roderick Deane, which is what other new entrants tried to do, we went about running with our strengths, building our momentum in areas where we had obvious competitive advantage," Mr Williamson said. "We never tried to bite off more than we could chew. We always tried to under promise and over deliver ... Anyone can take 5 per cent off your phone bill, but who can shift your bottom line by 5 per cent?"

However, pragmatism has its limits, and another Williamson mantra of "doers not suers" was abandoned last month when the company filed proceedings against Telecom on a customer re-billing complaint.

"I don't have many regrets," Mr Williamson said. "My first regret is that we are in court now, but by the same token you have responsibilities ... it's about competitiveness and we can't stand by and let this happen."

In common with other carriers, he was strongly critical of Telecom's unilateral imposition of local Internet connection charging, saying it would damage the market to the detriment of New Zealand's international competitiveness.

The Internet itself he sees as confounding marketing theory which says products have a life cycle beginning as a start-up, moving to becoming a cash-cow, then becoming a dog. The Internet, in contrast, began life as a commoditised dog, and was rapidly moving into the cash cow phase where service was being distinguished on quality and products.