[TelstraClear] TelstraClear boss predicts huge losses

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geek4me

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#10963 22-Dec-2006 10:45

Today's announcement from a leaked staff email that TelstraClear predicts huge losses does not make good reading see http://stuff.co.nz/3907413a13.html.

They are on a "trajectory to disaster" and facing a loss of $7 million according to their chief executive Allan Freeth.

If you feel inspired, provide some comment in this thread. What does it mean for TelstraClear's future and how will it affect us - their customers? Do you have any advice or wisdom to offer for TelstraClear?

[Moderator edit (MF): hyperlinked]

freitasm

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#56152 22-Dec-2006 11:07

I have to say this e-mail found its way to my Inbox through a third party, and with our editor we decided not to run a story on this.

This sounds much like the now famous Yahoo!'s Brad Garlinghouse's Peanut Butter Manifesto, "leaked" to the Wall Street Journal mid-November 2006, with a raw account of Yahoo!'s position in the on-line publishing market.

The papers are avid to exploit the financial aspect of the thing, forgeting since this was on their financial pages. What is not mentioned is how TelstraClear's boss Dr. Allan Freeth was clearly recognising the status quo, the flaw in customer services, etc.

Papers actually just ran this as a financial thing, completely forgeting the "service" aspect of te company. It looks like some writers think companies make money, but have no intent of selling or providing services.

Really, even though some of the stuff in the full e-mail sounds bad, it's a call for arms, and kind of inspire people. Of course papers will only post the bad stuff, but in the last few months I've seen TelstraClear trying to turn around.

on2it

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#56153 22-Dec-2006 11:09

TCL should build a network and sell services on it.
If they don't know how perhaps they could ask Voda for a few tips.
It's not like they're short of cash - Telstra is six times larger than Telecom.
A business case built on whining for 'guvmint' is shaky at best, pathetic at worst.

freitasm

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#56155 22-Dec-2006 11:15

on2it: TCL should build a network and sell services on it.

I suggest you investigate more. TelstraClear does have a network and does sell service on it.

sbiddle

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#56157 22-Dec-2006 11:42

Look at it another way - with the exception of the current financial year where they expected to break even TCL have lost money since they entered the NZ market. A $7 million loss is about as close as they have got to breaking even. The size of their investment and the size of Telstra makes this loss sustainable to maintain a presence in the NZ market. Telecom NZ are losing more than $7 per month just to stay in the Australian marketplace.

I fail to see how this loss really has any effect or impact on their plans. Freeth has come in with no knowledge of the telecommunications sector, in many ways this could be seen as both good and bad however he has acknowledged many of the faults within the company and has tried to fix many of these.

sbiddle

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#56159 22-Dec-2006 11:45

on2it: TCL should build a network and sell services on it.
If they don't know how perhaps they could ask Voda for a few tips.
It's not like they're short of cash - Telstra is six times larger than Telecom.
A business case built on whining for 'guvmint' is shaky at best, pathetic at worst.

What planet are you on? TCL have a network and are spending $50 million rolling out a WCDMA network. Unlike when Rosemary Howard was the boss and did complain a lot TCL have not go on with their business.

on2it

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#56201 22-Dec-2006 20:26

>I suggest you investigate more. TelstraClear does have a network and does sell service on it.

Problem is the end to end bit is tiny - limited to the bits Saturn built out and Telstra stopped, claiming "you can't overbuild an incumbent's network".

Well Voda did. Optus did. And made a success of it. Telstra just got the pip when they couldn't get resource consent to string miles and miles of butt-ugly inch thick cable all round Auckland like Optus did all over Sydney.

So they're stuck with selling "retail-minus" Telecom tails and whining about how unfair life is.

Point is, there's nothing stopping the Aussies digging up the road like any other utility - power, gas, telco - there are special provisions in the RMA to allow it. How do you think we're going to get fibre to the home, or at least a very close cabinet, when the DSL technologies run out of puff? Telecom are going to have to dig up the road and Telstra can do that just as easily.

The select committee was very clear that the incentives on the so-called "ladder of investment" would reward those who build their own infrastructure - thats Voda and TCNZ at present - everyone else has to live on the crumbs of reselling other's networks or pull finger and actually build something

>What planet are you on? TCL have a network and are spending $50 million rolling out a WCDMA network.

$50m doesn't buy much - I seem to recall Telecom stating they were spending $20m * a week * - admittedly across all their networks. I'm told the average cellsite costs about $500K including land acquisition, kit, and lawyers and both players have about 1,000 sites - so a *real* network costs closer to half a billion. Presumably this gets quite a bit cheaper with co-location.

Once again Telstra are farting around with a bit of a network although I realise the play is also about trialling wireless local loop etc.

tonyhughes

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#56202 22-Dec-2006 21:24

on2it - you need to format your posts better. One big long paragraph like that is difficult to read (I got less than halfway through).

There is a 'quote' button at the far right of each post to generate nicely formatted quotes so we can tell who said what.

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on2it

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#56273 24-Dec-2006 11:39

> you need to format your posts better.

Thanks for pointing out the obvious. For some reason Safari under OS-X doesn't format correctly at least on my Mac. Now with XP it's no problem. Just another example of how life with a Mac is 'hard' - let's not start - I've had a Mac since 1986 and use both...

My point is, Telstra are only mucking around in NZ - those who have built end to end networks are reaping the rewards - in TCNZ's case 100% return on equity (they're very highly geared at present)

riahon

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#56274 24-Dec-2006 12:22

freitasm:
on2it: TCL should build a network and sell services on it.

I suggest you investigate more. TelstraClear does have a network and does sell service on it.

More a local network... share the love TCL, share the love.