KEY POINTS:
A year ago Telecom chief executive Theresa Gattung confirmed one of the telecommunication industry's worst-kept secrets. She blabbed that confusion was a key marketing tool in the telco business and that companies had made a killing by "not being straight up" with customers.
Gattung made the confession at an annual Telecom presentation to Australian analysts.
Last week Gattung and co were back in Sydney for her last presentation before she quits the company. Her contribution had the air of a farewell speech: an overview of where she sees technology heading and some typically Theresa anecdotes about her 12 years inside our largest listed company.
Recounting the early days of mobile phone technology, she told the analysts: "Mobile was this little up-start division [within Telecom] that carried its phones around in its big bags and the rest of us thought, 'oh, they're so up themselves those guys'. And then it became a huge driver of growth in the consumer business."
Another musing from Telecom's Paleozoic era was: "I can remember coming back from a conference overseas and being asked by very senior people ... what's the internet?"
While Gattung spent a little time reflecting on the past, most presentations focused on the present and where Telecom sees itself heading in the newly regulated environment.
The company insists it is changing but the presentations revealed a curious combination of a newly self-aware go-get'em spirit mixed with the arrogant, monopolist attitudes of old.
Observing Telecom finding its feet in the new environment is a bit like watching a primary school bully waking up to the tearful reality that he's now in high school and throwing his weight around no longer works.
Gattung said the company needed "to remain open and adaptable to new business models, figure out which ones to jump on, execute on quickly, and deal with course adjustments or even having made a miscalculation, and that's quite hard for us to do".
Why is exhibiting business agility so difficult? "It's quite hard for us to do because it goes against our grain of managing risk sometimes. It's quite hard for us too because there are so many people watching us and we feel like, gosh, they're going to point out if we've got this wrong before we've even had a chance to get it going."
Excuse me if I don't pull out the handkerchief. Isn't leadership about making the hard calls?
This bout of corporate self-doubt is about pining for the good old days when Telecom raked in huge profits by under-investing in its monopoly infrastructure, to the detriment of New Zealand's economic development.
The messages out of Sydney were that the restructuring forced on the company by the Government was diverting resources that would otherwise go into running the business, investors were underestimating the significance of the new regime, and future infrastructural spend would be driven by the likely return on investment.
The management distraction caused by the restructuring seems to be most clearly highlighted by Telecom's dithering over its future mobile network technology. The company will inevitably have to switch from its CDMA mobile platform to the more globally popular GSM/UMTS standard Vodafone uses.
Rather than bite the bullet and make the switch, it seems to be dabbling with cheaper hybrid options. So it will continue to cede control of the lucrative business mobile market to Vodafone.
The old-school Telecom mentality came through when Gattung was asked about the likelihood of a third player entering the mobile market.
"I think this might be one of the areas where [as a competitor coming in] you've really got to have a bullish view about what you could differentiate in terms of your service offering because we've got 90 per cent penetration in mobile in New Zealand."
That comment smacks of Telecom's trademark arrogance of old.
If Gattung truly believes there would be no appetite among mobile users to switch to a new entrant after enduring years of comparatively high charges from the present duopoly I suspect she is mistaken.
