Geekzone readers were asked to submit questions to Dr Allan Freeth, CEO TelstraClear, and we now publish the answers to those questions.
Dr Allan Freeth was appointed Chief Executive Officer of TelstraClear in 2005. Prior to joining the company, reflecting his wide-ranging strategic and management skills, Allan was a member on the TelstraClear Advisory Committee and Managing Director of Wrightson. This followed five years with Trust Bank in a number of senior roles before being appointed General Manager, Executive Office.
Allan became a Doctor of Philosophy in Population Genetics through the Australian National University in Canberra, has a Bachelor of Science (Hons) from Canterbury University, and an MBA with Distinction.
He is a member of the Treasury Advisory Board, a Director of the Geological and Nuclear Science Crown Research Institute, and is Chairman of Save the Children New Zealand Board, and has just stepped down as Chair of Queen Margaret College Board of Governors.
1.When will TelstraClear be offering mobile services for consumers, which in terms to help consolidating all bills into single-billing? And when will we see a GSM/3G implementation of TelstraClear's mobile?
Our initial focus has been on the business market but you can expect a consumer offering within the next few months. It will be different and available on the same bill. In terms of 3G, we will transition customers to new services when WCDMA is available.
2.What is your perspective on the 'ideal' model of telecommunications infrastructure in a country like New Zealand? For example, do you prefer that every ISP owns and operates their own end to end network from CPE through to national or international peer, or a LLU model, or a shared national network, or something else?
For TelstraClear the answer is a combination of the two. In Wellington and Christchurch we have a great network and offer a fully integrated service. In other areas, such as Nelson and Whangarei, we will partner with others to use their network to deliver services. We also use resale. Ultimately, the question is not whether we own the network, but whether we can profitably offer a differentiated service to customers.
3.Is TelstraClear strongly influenced either explicitly or implicitly in its strategy by the past and present strategy of Telstra Australia?
Can you give some insight into the managerial relationship between Telstra Australia and TelstraClear New Zealand?
TelstraClear is a subsidiary company, operating as the challenger in a different market. We have our own Board of Directors and operate under a strategy we have developed and the board has approved.
In practice, we have day to day contact with Australia over how to best serve customers. Telstra has 38 of its top 50 customers based in New Zealand, so there is a high degree of operational cooperation. Also, they have some fairly impressive management systems and technologies which we leverage as much as we can.
While we are very different, we are totally aligned on principles, such as the need for a fair return on investment.
4.Do you believe it is the place of an ISP in this country to take any social responsibility with their products and services, or should they simply do the minimum required by law and otherwise act as a purely money making enterprise?
This is a complex issue or morals and ethics. However I do agree ISPs have a role in ensuring their services are not used to cause harm to the community. We will soon be making some announcements around safe use of the Internet that we believe furthers this objective.
5.I admire Google for their ability to diffuse technology openly and still turn a profit. Are there any companies or people that you aspire to and do your aspirations influence the strategy of TelstraClear or other companies you had/have influence over?
I’ve been fairly impressed by the success Telstra has had in its transformation. Being so closely linked to them means you can appreciate the size of the challenge and the impact new services like NextG (their mobile network) and BigPond have had. The operational challenges, which most customers never see, are absolutely daunting and many critics said they’d fail. We are seeing some world class results in Australia now and my job is to leverage as many of them across to NZ as possible. I think the aspirations of all leaders influence the way they manage or lead companies.
6.What is your opinion on the obligations set out in the Copyright (New Technologies) Amendement Bill for ISPs over Copyright Infringement by your customers? What is TelstraClear's Policy on this?
This is an issue our legal and regulatory teams have been taking a keen interest in and it has been a hot topic in Australia too. The Bill you refer to has been passed by Parliament, but the changes have not come into force yet. These changes include imposing obligations on ISPs to terminate the accounts of customers who infringe copyright and also to remove infringing material from websites. We see significant practical challenges with this as we have no real ability to determine whether or not any given material infringes copyright. However we will put in place appropriate processes to ensure that we comply with the law, in a manner which also protects the interests of our customers.
7.Is TelstraClear planning to follow Vodafone and Orcon into LLU? Or build your own network?
At a recent conference I made it clear we are very interested in unbundling. We fought for it and remain a company that is geared up to provide services to more customers than it can currently reach. So, no details yet, but watch this space.
8.Is TelstraClear going to keep developing the old Saturn cable network or is it just "as it is until outdated" type of setup?
TelstraClear has invested heavily in the cable network that already passes around 1000,000 households in Wellington and Kapiti and 60,000 in Christchurch. The demand for those services has been huge. In fact, as best we can tell, the near 50% share of the consumer market we have in both cities is a world best for a challenger selling off its own infrastructure. To future proof against that ongoing demand and to ensure the service and performance is enhanced we are currently finishing a significant amount of work on both the Wellington and Christchurch networks.
Customers have already started to see the benefits of this upgrade with TelstraClear announcing a 25megabit broadband service to selected areas in Christchurch.
In addition we have already started to investigate the next generation of cable technology, offering even greater speeds and higher density. This new technology is targeted to be introduced into the network within the next 12 months. So, as you can tell, TelstraClear is not standing still and we are investing more money, time and technology into the future of the cable network in Wellington and Christchurch.
9.Is TelstraClear still considering a mobile network of sorts, maybe based on new technology?
No. This is a saturated market and we plan to compete via other player’s networks. Recently we formed a new business unit for mobile and have launched our own branded service. For mobile, TelstraClear does everything in-house from order taking to provisioning. For business customers, mobile allows us to offer a whole of business proposition and our research shows customers place growing importance on this. They value having one provider, one point of contact at that provider for all their services and receiving one easy to read and understand bill. TelstraClear provides that.
10.How do you expect Clearnet to compete with the likes of New Zealand Herald and Stuff? Can you honestly sit down, open the website and say this will make people switch from their current news site to this new portal? What does the portal have that other sites don't?
The question assumes we have created a news portal. Clearnet has news, sport and weather already and more sections will follow. What we have delved into in some depth is gaming, with the benefit that those who have TelstraClear as their ISP get to use games without paying for bandwidth. Our objective with clearnet.co.nz is to showcase broadband. Hence our initial focus on the gaming sector where the speed and quality of broadband is paramount.
The site has historically been the landing page for our Clearnet customers to check their usage and webmail and that continues. We have not only migrated those customers successfully but we have achieved double digit growth in subscriber numbers since launch exceeding our projections. As we add new functions and content we expect that growth to increase. You should bookmark the page and check it out regularly because the content initiatives that are planned are fresh and exciting.
11.Does TelstraClear have plans to support HD? When?
Yes we do plan to pass through HD content from TVNZ, Sky TV and TV3. We are also planning to add additional HD content from other sources currently under negotiation.
12.It was a huge shame when TelstraClear de-peered from WIX/Citylink. This has huge ramifications for people wanting to use services that are connected to Citylink, although they live 1km away from the server they want to connect to, yet the traffic is routed via LA. How does that in the interests of the customers? The only option is to use an ISP like Xtreme or someone else who on-sells TCL Cable Services that do peer with Citylink.
Peering has become an extremely emotional issue, as noted in the recent Internet NZ report, which also noted there was no evidence of market failure.
Our decision was a commercial one – we need to earn a return for the use of our assets. While some people believe the Internet is ‘free’, I can assure you my shareholder doesn’t see it that way. Organisations that have content they want to supply to end users can buy a service from us, which is tied in with the cost of national carriage. This is still more cost effective than international bandwidth.
13.Will TelstraClear ever offer the option of a-la-carte channels? For example, why do I have to get all the Sky Sport channels if I want the Rugby Channel? Why do I need to get a bunch of other channels like Fox News to get the Arts Channel?
We offer the Sky TV package with regard to Rugby Channel and the rule is you need to have sport to get the Rugby Channel. We are investigating more channels which may be priced individually or in smaller packages to suit niche tastes in the market. The cost of delivering sport and movie channels is much higher than channels such as MTV, Food, Living or Fox News. Therefore, bundles are built to cater for most tastes.
14.Telecom New Zealand is implementing their Next Generation Network using various modern technologies such as ethernet and IP communications. What initiatives (if any) is TelstraClear taking to modernise and/or improve their network infrastructure?
TelstraClear was the first to introduce a National IP network in June of 2001 and has been providing Ethernet based IP services since then. The IP/MPLS network has grown substantially since the introduction and we now have core IP PoP’s in major cities around New Zealand. We also provide IP based connectivity to Australia via our PoP’s in Sydney.
Demand from our customers for IP based services continues to grow and over the last 12-24 months we have upgraded our metropolitan access in Auckland and Wellington to 10gig capability. Christchurch is scheduled for a similar upgrade over the next 12 months.
We have recently announced the completion of our lower South Island fibre ring going from Christchurch through Dunedin, Invercargill and Queenstown.
This will enable customers to connect to the Telstraclear IP/MPLS Network.
When TelstraClear introduced the IP/MPLS network we provided multiple 2.5gig of bandwidth between Auckland, Wellington and Christchurch. Again, due to customer growth and increasing bandwidth consumption we are undertaking a program to upgrade these diverse paths to 10gig capability.
We are committed to providing multiple services over an IP converged network and see our future investment and efforts going into this network while legacy network based services subside.