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Bartlett takes control as Orcon merged into Kordia NZ

Belying industry speculation it would sell Orcon (its only retail division), Kordia has instead brought it closer.

Orcon iis being merged with the business communications-focussed Kordia Networks.

The new division will be known as Kordia New Zealand, and be headed by Orcon CEO Scott Bartlett.

Geoff Hunt remains in overall control as CEO of Kordia Group.

State-owned Kordia as a whole has 1400 staff and made a $12.1 million profit on revenue that increased 35% to $399 million in the year to June 30 - largely on the back of the fast-growing Kordia Solutions Australia.

Profit was not broken out by business unit.

The new Kordia NZ unit (Kordia Networks plus Orcon) will have an annual turnover of $161 million and account for 320 staff.

Jobs offshored
The merger will save costs on duplicated network infrastucture and support staff, Kordia says.

Over the next four months 50 Orcon call centre jobs will go, outsourced to a Datacom operation in Manila.

Ironically, the news came on the heels of Prime Minister John Key's co-announcement, with visiting Filipino President Benigno Aquino, that the Philippines will grant work visas to 100 young New Zealanders a year (and 100 Filipinos the chance to work in NZ).

Focus on producs and services
Mr Hunt told NBR that, simply, "Datacom do call centres better than us."

A pilot outsourcing programme earlier this year had gone well. Some Orcon calls have been handled from the Philipinnes for more than nine months.

"Call centres take a lot of energy," Mr Hunt said. Kordia was good at engineering and product development, and wanted to focus on those areas.

Qualms over sending jobs offshore?
Mr Bartlett speculates that "many affected call centre staff could find jobs at Australia’s second largest DSL broadband provider, iiNet, which operates a call centre in Auckland."

Mr Hunt said they were "good people with good skills." Kordia was proactively helping them to find work, both with iiNet and two other options. He was confident they would find work.

Labour ICT spokewsoman Clare Curran disagreed, saying Kordia had just sent another 50 Kiwis to the dole queue. "This is the same short term thinking that’s seen 220 jobs lost today from SOE Solid Energy. That’s 270 jobs culled from SOEs today. National has removed the social responsibility clause which ensures SOEs have to take into account community interests and this is the result."

Did Mr Hunt have qualms about sending jobs offshore?

No, he told NBR. His focus was on creating  as strong company to provide certainty for staff and clients and "an appropriate return for our shareholders" (notionally, Finance Minister Bill English holds 50% of Kordia Group's shares, SOE Minister Tony Ryall the other half).

Back in black
In August, Kordia revealed a swing back to profit on a 35% surge in revenue.

Although Orcon (27%) and Kordia Networks (14%) grew strongly, the biggest driver was Kordia Solutions, the telecommunications consulting and contracting arm - particularly across the Tasman where it grew 58% on the back of the resources boom.

Kordia NZ's focus
Mr Hunt told NBR that within the new Kordia NZ division, Orcon's focus would be on the home and small business markets.

The wider Kordia NZ would focus on bigger business customers.

Those include Sky TV, whose content delivery network (CDN) used to deliver its iSky on-demand content, is managed by Kordia Networks.

Where there was crossover among Orcon and Kordia Networks business clients, particularly in the area of wide area network (WAN) services, the customer would shift from an Orcon-branded service to the broader Kordia NZ brand and "OnKor" services.

Kordia's partnership with Microsoft to push its Lync product (which unifies voice, email and other communications into a single system) will also fall under Mr Barlett's Kordia NZ domain. 

The SOE's new IP networking service aimed at interconnecting regional fibre companies involved in the $1.35 billion Ultrafast Broadband (UFB) rollou will also come under Kordia NZ.

ckeall@nbr.co.nz

More by Chris Keall

Comments and questions
42

Great - now we will get scripted answers to support calls. This wouldn't matter so much if there weren't short regular outages on the Orcon network.

Forgetting the politics of it, when I was with Telecom (left because they don't provide naked broadband) I found its Manila-based call centre actually really good at addressing broadband issues. Quick to answer, easy to understand, and fixed my problems quickly.

There is hope then. When I had some problems their triage process was a nightmare. We shall see.

But while they keep having outages I don't think it is smart to outsource. Just my opinion of course! :)

Hmmm. I had exactly the opposite experience. Scripted response from the call centre staff, who appear to have no technical knowledge at all. Problem was only resolved once it was transferred to an engineer in New Zealand.

Its not just orcon - Telecom, Vodafone, Telstra, Slingshot., everyone and their poodle is slashing and burning.

Ironically we now have cheaper telco stuff but less people can afford to buy it. So here's to competition, what a joke

The moral of the story is that when the govt and the commerce commission gets involved, things get broken and sadly the telco sector is a trainwreck

yay - more jobs going overseas!

Good, coz Kiwis love talking to Philippines about their internet issues

I worked at Orcon for a short stint, one of things preached by Scott Bartlett was that the call center would ‘never’ be outsourced. This was repeated time after time, even during the mass lay offs during 2009.

but Orcon will cease to exist. Scott is in charge of a new entity, so he kept his promise with regards to Orcon didn't he?

I love your lies are not lies approach! You should have a career future in Politics, Banking or Advertising.

Z petrol bought call centre jobs back to NZ and I have used their services both pre and post move back to NZ - the current situation is far better for me as a customer. Tsk Tsk Kordia

Why would you call a service station's call centre?

Plenty of reasons to call Z Petrol's call center: (as an ex oil company rep:)

If you are a farmer or large business needing fuel or oil delivered in bulk.
If you are a service station needing a fuel delivery.
If you are wanting to sign or renegotiate a fuel card arrangement for your business.
If you are wanting to query technical details of products.
If you are bored. and so on

So let's see - couldn't find a buyer for Orcon so change the model by putting Scotty in charge of NZ while Geoff focuses on the bit that makes the actual money - Australia.

When will the government find a buyer for this weird business?

Orcon Orcon Orcon.. you were a fun place to work.. until you slowly cared less and less about staff turnover and more about trying to dominate the market.. I know a lot of hard working, over dedicated people who work there.. who just lost their jobs. On top of under paying them the whole duration of their employment. I really didn't think Orcon was that way inclined :<

I heard there may not be a redundancy package, I really hope that isn't the case because the staff deserve it. Vodafone payed out quite handsomely for their redundancies to ihug staff years ago, you should follow suit.

ps. Nice picture Scott ;)

Maybe they will provide a redundancy package like last time,which I believe consisted all of 3 months free internet to find another job on Seek. Nice!

At Orcon's pricing, that's quite a lot.

So that leaves just Slingshot as the only major ISP with a NZ call centre. Will they be next?

Vodafone moved its call centre operation back to NZ last year (http://www.nbr.co.nz/article/vodafone-creates-125-jobs-egyptian-contact-centre-comes-home-aw-89679). I've found both Telecom (in part Manila-based) and Vodafone's support desks good. Beyond geography, staff numbers and training are key elements.

Actrix is not as big as these other guys, but we have been in the market longer than any of them including Xtra. The Directors are committed to a NZ based support team. This is what our customers want and why they stick with us. Customer Service is the driver for our business and its success. We differeniate ourselves from the competitors and it just got easier with the Orcon move. Actrix Networks

Vodafone NZ manages to have 100% based NZ call centre here in Auckland and they recently brought 100 IT jobs back to NZ as well! WHY ORCON WHY???? Shame on YOU!!

Vodafone + TelstraClear = offshore call centre. Chris ask them to deny it,

TelstraClear have their Call Centre based in the Philippines - that is true.

Vodafone however, have 100% of their Call Centre based in NZ!!

I bet, when Vodafone NZ get the sign off, from the ComCom (should be next Tuesday) that eventually the TelstraClear Philippine based Call Centre, will also come back to NZ.

No way. Vodafone only came back because Egypt shut down the internet!

Now that they have bedded down the TelstraClear sale, it will all move offshore again.

Being a state-owned enterprise, I hope Kordia are paying very special attention to the privacy of all that customer data they are off-shoring in their haste to save a buck.

The possibilities for people's personal data getting abused in dodgy offshore call centers is well known ... have they read the Privacy Act recently I wonder? I think they might find shipping govt. databases of personal data overseas is questionable if not illegal, without court orders.

Does anyone recall the statement " We are running a business, not a charity organization ." from Kordia Group CEO a while back? He is doing what he is paid handsomely to do, and he is doing what he needs to do to keep his own job.

As Lee Iococca famously said to Chryslers' employees " I have 2 jobs for $15/hr or no jobs at $30/hr. You choose."

NZ has to wake up to some realities - sooner or later. Sooner is better because we will still have jobs here. Later will see more New Zealanders on the dole queue and/or in Australia.

So presumably this means you are happy for New Zealand to become a low wage, low skilled economy as long as you are making money out of it?

Presumably you are happy for 109,500 New Zealanders sitting at home and doing nothing but rot away.

Tell us please how you are going to create jobs and what jobs you have in mind for those who are going to join the dole queue?

The pertinent question here is - is putting Bartlett in charge Kordia NZ part of succession planning or is this part of the chain of mistakes that will lead to Hunt's redundant role and departure ?

Orcon service was getting bad before this announcement it now looks doomed. In a competive market premium users who make these guys the real money will not stick with them with this approach.

Keeping his job is fine what about these call centre staff. Govt jobs for the boys again . Is this now the govt will get us out of this recession

That mealy-mouth Bartlett gives an undertaking to keep the jobs in NZ, but then exports to Manilla. He wouldn't give a back of oats for the staff here.

when will the so called business leaders realize, economy runs with the people and by the people, take off jobs lay off people they wouldnt have buying power. these so called leaders miss the basic point. where will be buying power coming from if people dont have jobs whos going to use the service, its a cyclic chain, instead of looking at their pockets they should break the vicious cycle.

Orcon over-ambitiously tried to corner the market on local loop unbundled plans and poured way too much money into ineffective marketing strategies that either didn't get enough new customers (the Iggy Pop stuff) or got way too many new customers (the $80 cardboard drop promotion) which its network and support staff couldn't keep up with. It sacrificed its foundational values (no term contracts, top network performance, locally based and fast-to-answer call centre) and lost goodwill in doing so. Customers realised that they were no longer getting good service, that prices were lower elsewhere and that the staff simply wasn't good enough. Orcon lost customers and lost money because they grew too quickly without the proper support infrastructure.

The reality is that neither Kordia, nor Orcon should be government owned in the first place. There is no justification for the government owning these types of businesses. There are plenty of private sector providers in a compettitve market.

So are you saying Lindsay that this wouldn't have happened if they were in the private sector??

This is shocking for a 100% govt owned SOE ! The company made a profit (not sure SOE's should make profits ?) and so unlike Solid Energy is under no pressure to reduce costs or lay off staff. Listen up guys - we as customers want service - we dont want to talk to scripts in the Philippines ala Telecom, Jetstar etc. We want someone local who knows what they are doing and can help ! Sharpen up please. By all means use a specailist NZ based call centre if tyou want to outsource but we want quality. Guess I wont be buying Orcon's UFB after all. Vote with your feet people.

Lindsay absolutely agree. It is a real concern that after deregulating and privatising the telco sector in the 90's the Govt still remains a player in a totally competitive market. Makes no sense at all.

to: "And then there was one":

It actually makes Slingshot the only real Telco that is owned and operated in NZ entirely.

more jobs going overseas. shareholders profits before people - yet again in NZ. People are sick of overseas call centres, bring them back onshore and keep Kiwis in work.

Just take a trip to Vinegar Hill.