KEY POINTS:
As office equipment and applications move on to the network, the companies that provide that equipment are following.
Cogent, the telecommunications arm of office technology group Onesource, has hired former Telecom executive Graham Mitchell as general manager to help reposition the business in the market. It is a market distorted by the monopoly or duopoly status of his former employer and its competitors in various sectors.
But it is also a market that is likely to undergo significant change as the Government changes the rules to encourage greater competition.
Back in the country after several years working in the venture capital and technology start-up area in Australia and the United States, Mitchell can only shake his head at some of the anomalies that have grown up around pricing and services here.
"New Zealand is one of the few places in the world where it is cheaper to make a fixed to mobile call than a mobile to mobile call," he says.
"In Australia you don't think about using a mobile phone.
"Corporate rates can be down as low as 20 cents a minute."
New Zealand has the highest texting market and the lowest voice minutes in the OECD.
That has an impact when organisations are assessing their telecommunications technology needs, particularly when like so many New Zealand firms they have a highly mobile workforce.
Mitchell says compared with similar companies across the Tasman, Cogent has an enviable market position.
Its history is as a PABX reseller, though it recently became a reseller of Vodafone services, allowing it to do fixed to mobile integration at the PABX level.
Through its parent OneSource, which also owns the Konika-Minolta business, it has a lot of relationships in the medium business market.
It bills 20 per cent of such companies regularly for photocopiers and other services, and it has another third on its databases from previous sales or contacts.
"There is no one else outside the telcos with that market presence," Mitchell says.
"It's good because we have people visiting the customers, we have kit on customer sites.
"Technology is confusing and expensive for many organisations, who would prefer to work with fewer suppliers.
"We're selling PABXs, we're starting to sell data network equipment, routers, LAN switches, and bundling that with services.
"We can go to a medium business owner and say we can finance the equipment and then bundle service as well as voice, internet, and we have the technicians to install it and give that additional comfort.
"That's the sort of service many of the larger corporates have enjoyed from their outsource suppliers.
"We want to leverage off the networking equipment which is already on customer premises, and move into IT and data.
"We have to do that anyway, because the PABX now is basically a transporter for VOIP (Voice over Internet Protocol).
"You have to get into data network management, because you are helping manage the LAN, so you may as well sell the boxes that go with that and finance that."
It raises questions about how far Cogent will go.
Much of that will depend on how wholesale services for various forms of network and internet access develop.
Mitchell is frustrated at the current state of the mobile data market, given its potential for workforce management and on the road productivity.
New Zealand business, especially at the smaller end, has a highly mobile workforce, he says.
"Imaging a mobile service force with lots of PDAs out there, wanting to send a picture of a fault to a technician back at a desk.
"That may mean100mb of video.
"At current prices, it's an unlikely scenario here.
"Pricing is not cost related, and to get penetration the telcos need to drop their prices to get return on investment."
Despite New Zealand's strong café culture, the sight of people using wirelessly connected laptops in cafes is still rare, compared with places like the United States and Japan.
Mitchell says inter-fleet calling, such as Cogent is offering through its Vodafone relationship, are likely to become a more important part of the business landscape, unless mobile phone rates drop significantly.
He also wants to see more symmetrical use of the internet.
New Zealand consumers have put up for far too long with upstream rates that lag downstream rates.
"In the new broadband world, people don't only want to receive data, they want to send data, and that's going to increase with the digital home."
The key is going to be improved peering relationships between domestic internet service providers, so traffic is swapped here, rather than being routed through servers in the United States and elsewhere, all of which adds additional costs to the New Zealand internet.
Mitchell was in at the ground floor of the commercial exploitation of the internet, overseeing Telecom's Xtra and Yellow Pages business and its internet business in Australia.
He shifted to its core AAPT business across the Tasman, before leaving to work with venture capital funds doing recovery and expansion work on businesses they had invested in.
