Moutter mouth


Chris Keall

Telecom's boss talks to NBR ONLINE about:

  • The future of telecommunications
  • Competing, cooperating with or ignoring Sky TV
  • Why UFB fibre to the home is not ready for primetime
  • Telecom's Aussie division: is it still on the block?
  • The coming spectrum auction and 4G
  • Restructuring

New Telecom CEO Simon Moutter is explaining why I can’t have all-you-can-eat broadband, and never will.

He’s seen the future and it’s all about data.

 “What else are we going to sell but gigabytes?," Moutter says.

"Inside the next few years, voice is just software, messaging is already rapidly turning into software via Facebook messaging and iMessage and everything else. All of us then – Voda, CallPlus  - we’ll all going to sell gigabytes actually, fundamentally.

 “So you can’t move to a position where that’s unlimited. That would be like saying electricity is $150 per house, use all you want.

“You can’t have unlimited and fixed [price] because what else do you earning any revenue for in the future?

“We saw this on the internet when we removed speed as a differentiator. So there’s no differentiation in the product any more. It just is what it is at your house. At the moment the bundling of gigabytes and a bit to do with the service wrap – whether you’ve got a 9-5 call centre or 24 hour – is about it for causing product differentiation.

“And I don’t think differentiating in content [like pay TV and movies] is going to be all that significant because there are so many places to buy that over the top. 

“So gigabytes is actually what we’re going to sell.”

That’s a blunt assessment of where telecommunications is going. And I would say an accurate one. Moutter began his carrier selling power, now he’s selling bandwidth – which is rapidly becoming just as much a commodity as electricity.

His big plan
As for his immediate next steps, Moutter is not saying much until he unveils his big strategic plan.

It will outline where he sees Telecom heading in a world where he sees the company as a “mobile-centric reseller with thinner margin fixed broadband” and “enormous variable costs” as it pays spun-off network division Chorus around $900 million a year for access to its lines.

Content: the defining question
His big plan will come out in April or May for implementation in Telecom’s next financial year from July 1.

That being the case, we’re left with the big conceptual stuff, and the small stuff – which can be revealing.

Regardless, I always ask people in the industry about their personal setup, because I think it colours their outlook (which is why I was disappointed our new Telecommunications Commissioner is a relatively low bandwidth, bit-of-browsing-and-email internet user.”

I ask Moutter how he watches movies.

He downloads them from iTunes. He hasn’t visited a video store in ages.

I find this encouraging. He’s keenly aware which way the world is heading.

But nor does that mean he’s necessarily going to go ga-ga over bundling content with broadband.

A turning point will come when Telecom launches residential fibre under the Ultrafast Broadband (UFB) rollout (which Moutter says will probably be in the second quarter of next year; more of which shortly).

Vodafone has made its position clear: it doesn’t want to be in the business of signing content deals. It’s happy with its partnership with Sky TV, and its TelstraClear purchase has brought with it a ready-made MySky clone in the form of the T-Box, which it will deploy, or a settop box like it, if it decides to bundle video.

I put it to Moutter that Telecom’s decision over content will be a defining one for Telecom. It will play into whether it’s a very similar company to Vodafone/TelstraClear, trying to do a sharper job at selling essentially the same set of services, or whether it busts out and signs it’s on content deals and competes with Sky TV.

He agrees.

 I’ll quote him at length here, because it’s something so central to his company (not to mention Sky TV shareholders).

Telecom’s talked about value-added services with fibre. Does that mean it could potentially get more average revenue per customer – because of course you’ll be losing the fixed line [home lines were always a cash cow for Telecom; on a fibre connection, phone calls are all via the internet]? Chris Quin [now Telecom retail CEO] said video would be one of the services, including sports, but didn’t detail how.

"That’s one decision where we’ve got no decision yet in strategy so today there are a couple of people who resell Sky and there are a couple of over-the-top media and video offerings emerging from YouTube to Quickflix and Apple TV," Moutter says. [Apple’s wi-fi widget that lets you watch movie and TV programmes downloaded from iTunes on a regular television].

Telecom NZX performance since the Nov 11 Chorus spin-off. The company's shares took a hit in August after it announced a relatively buoyant result but suspended a buyback programme - apparently considering its own shares overheated. Source: S&P Capital IQ. Click to zoom.

"So that stuff’s underway. I think in New Zealand where the telco might fit in that in anything other than the provider of the bandwidth or the provider of the gigabytes is still a very big question mark and I think that one of the more significant elements of a strategic decision set we will communicate – where exactly we will play in that process … and that can be from nothing – we provide a fantastic, managed data pipe and make sure it works well and you buy everything you want over-the-top from various providers to some form of partnering with various providers to actually being a provider ourselves and aggregating or providing particular content.”

That will be quite a defining decision, won’t it?

“It will. It will be.”

Moutter notes that in the US, it’s often the case of a phone company (that’s diversified into pay TV service) competing with a cable company (which has added VoIP calling).

Here, things are complicated by the fact Chorus, not Telecom, owns the lines. 

“Because we’re resellers, we have a different driver in New Zealand. Overseas the telco and the cable company are offering the full triple play [voice, data, TV/movie content] but they’re mainly competing for the profit in the line. So they justify … they might not make much money from the content, but if they can win the customer and they stick they get the ebitda; they get the earnings for the line. Well, we don’t own the line – and neither do our competitors – so none of us have the rationale to make the line sticky," he says.

"So therefore the only basis for being in it [content] is if you make money from it. And they only way you can make money from content is if you add value to the process somehow. That’s the interesting thing. That’s the question I’m really asking my team. How will we add value to the provision of content if you can get it already from somewhere else?"

"Unless we can really answer that question, the default would be ‘get your content over-the-top’ and we’ll just provide you with a great data service.”

But couldn’t some kind of keenly-priced bundled pay TV service be the driver to get people to upgrade to the UFB I ask?

"Digital-terrestrial is still a great mechanism for broadcasting live events or the six o’clock news or whatever. There’s no particular reason to substitute it. But I think for our country the broadband network is going to substitute anything that’s ondemand viewed or satellite delivered," Moutter says.

"For me the challenge has always been ‘how do you get to the living room’ and I’ve always been very sceptical in the past was set-top box driven stuff – the economics are terrible, especially if you’re up against a good player like Sky, but the new enabler is the performance of in-home wi-fi and now with TVs [with built-in wi-fi] backending directly to the wi-fi modem it’s solving the problem.

“I watch high definition pay-per-view movies off iTunes. I don’t go to the video store anymore. And it’s there on QuickFlix and it’ll be there on other alternatives."

New technology will change content contracts
Certainly, Moutter brushes aside the Vodafone/T-box.

“My personal view – and my team is still looking at this strategically so I wouldn’t want to be definitive – is ‘why would I want a set-top box? The internet can do all of this and the wi-fi hook in new TVs and the dongle you can buy to convert a non-wifi TV. So I would be much more interested in models that don’t require any more investment in set-top box infrastructure. I think that’s yesterday’s solution. All the new TVs come with Quickflix on the front page. You just click here and buy so why would you want a set-top box? Why would you want to replicate a model from the past 50 years into the next 50?”

But Sky TV is not really fighting a technology fight. It’s locking down content rights (so for example, unless you use a workaround to joint iTunes US, none of the broad range of TV shows on Apple’s ondemand service can be accessed its NZ customers). Quickflix – whom Moutter keeps namechecking – has HBO among its investors, but threadbare content for its streaming service in NZ, where Sky TV has dibs on HBO content. And of course Sky TV has the All Blacks locked up – its live sport ace that sees many a BitTorrent pirate pay for a premium Sky TV package each month, whatever they download on the side.

Moutter concedes this is the case, but says “Look the new technology will cause changes to those business models. It just will. In the same way music rights have been enabled around the world.”

"I don’t think you want to assume because the way content owners currently trade or manage the value of their content through

"All those owners of content whether it’s sports or news or Hollywood movies will all adjust their models to maximise the advantage of the internet.

"And one of the things that’s profound about that is that they can take stuff to market quickly and efficiently all around the world at once. So the technology and the delivery mechanisms will cause those owners to find different models from today so I’m not stressed about what the current [local content rights] situations are.”

At some point, when rights come up for renewal, the likes of HBO are going to ask if it’s worth having a set-top box-toting middleman like Sky TV, or whether its better off selling directly to viewers around the world via global services like iTunes.

So, while Simon says everything is up in the air, if I had to bet my life I’d say there will be no Sky TV clone set-top box coming with Telecom fibre, or Telecom buying up content rights itself. The new Telecom boss quite clearly sees a future where TVs are seamlessly connected to the internet, and viewers browse any number of internet-based services for their premium TV and movie content.

UFB fibre being laid in Richmond Rd, Grey Lynn.

UFB: testing installers, testing patience
When will we see Telecom offering fibre to the home?

“We’re targeting the second quarter of the next calendar year. Our main concern is that when we go we’re going to go with scale,” Moutter says. “So the fibre companies [Chorus, Enable, NorthPower and Ultrafast Fibre] need to be able to deliver with scale, and volume and the service experience has to be good because probably our highest value customers are going to go their first so they’re the last customers we want to have a disappointing install or reliability experience.”

He also echoes Vodafone boss Russell Stanners’ comment that the UFB install experience is “nowhere near ready for primetime.”

“We’re still not satisfied. If there’s something that holds us up it won’t be our ability to purchase it and deliver the technology, it will be our concern about a poor service experience,” Moutter says

“Today, the reality is on the trials -  we’ve got a few dozen lines - they have been ... testing would be a polite word.”

Testing as in testing patience?

"Yeah. If you talk to people who’ve had fibre installed, it’s a big deal. It’s a lot of guys, a lot of complications. It’s sometimes taking a couple of days. It’s making a big of a mess.

“And there are quite high first-month failure rates.

“I’m not down on the companies for that. I does actually take a bit to learn and get your processes sorted but we’re not going to have confidence rolling out to our best customers until we’ve got that that more seamless.”

4G: It's all about the auction
Telecom has a 4G trial lined up for several business customers, using its existing 1800MHz and 2100MHz spectrum.

But Moutter makes no bones about Telecom wanting 700MHz spectrum when it comes up for auction shortly (the government hopes to realise around $200 million from selling the 4G-friendly radio bands freed up by the transition from digital to analogue TV).

In sparsley populated, hilly New Zealand, 700MHz is "orders of magnitude more economic [requiring fewer cellsites] and work a heck a lot better than 1800MHz or 2100Mhz,"  the Telecom boss says. "Our competitors will favour 700MHz too."

A reader asks, via Twitter, how big a role 4G will play; another when it will arrive.

Ahead of his Big Plan, Moutter won't comment in detail on either point (we do know Telecom has no capex for 4G in its current financial year).

He does allow that "It's reasonably inevitable that New Zealand market revenue will continue to bias towards mobile and mobile will get bigger than fixed.That's happening everywhere else in the world and it won't be any different here.

"Mobile revenue will dominate. We've barely started." New Zealanders are currently using 1 and a bit mobile devices per capita. He sees that going to three or four, or more.

He sees 4G wireless as a substitute for DSL or fibre in some households and small businesses, though with limits. For those who use tens of gigabytes, a fixed line will be more economic.

AAPT: on the block?
Under Paul Reynolds, Telecom tried to sell its Austrlian subsidiary, AAPT for half a billion or so. There were no takers for the division as a whole, but its retail division was sold.

Is AAPT still on the block?

"I've been over and had a couple of decent rounds now with the AAPT and Gen-i Australia teams," Moutter says.

"And AAPT is the best structured it's been since I've had anything to do with Telecom. It's got a clear market position as a wholesaler to carriers and systems integrators. It's got a very good high-end data product set, it's got a very good [11,000km] fibre network between the cities" [said cities now being connected by Australia's National Broadband Network]. 

Many wholesale customers like AAPT because they compete against Telstra and Optus, so appreciate an alternative.

"It looks closer to stable now in terms of earnings than it's ever been.

"It's still not on a massive growth trajectory or anything but it looks like it's finding a position that's sustainable." (AAPT's 2010 revenue was $1.1 billion, with $136 million ebitda. Last year, with its consumer business jettisoned it had $88 million ebitda on $664 million turnover).
All well and good. But does Telecom still want to sell it?
"My instinct at this point is let it run. Let's let it prove in. And we’ll keep our options open for where we go with it. But's not my highest priority. It's in okay shape and it's got a position in the market so I'll just let it run for now. My main instest in the New Zealand market, particularly in the retail business."
Swinging the axe
As Theresa Gattung's right hand man during his last tour of duty with Telecom (most of it as chief operations officer), Moutter was seen by many as The Enforcer.
Some in the industry have speculated he will cull Telecom staff to a significant degree.
Moutter says he'll address staff numbers when he unveils his strategic plan in April or May. Things are still under review (and although he's obviously in nice-guy mode for our interview, he's still no softie. Zooming in on a high resolution version of a photo of papers spread out in front of the Telecom boss, I can see a list of names on one. Some  are marked. "Most missed the deadline," says an annotation in pen).
He does offer that there will be a big focus is on making Telecom's operational systems more efficient. Here, there's been a bit of a lost weekend, with teams focussed on separation for 18 months, then an extended period of CEO changeover (remembering Paul Reynolds resigned at the tail end of 2010).
Speaking of Dr Reynolds, an NBR reader asks via Twitter if any of the Scotsman's Talisker is in the cabinet?
Moutter walks across his modest office and swings open a cupboard door and pokes around. It's whisky-free. 
The new CEO says he has inherited none of his predecessor's perks, beyond his carpark.
And indeed, although his Just Cuts fringe has disappeared since Telecom's annual results meeting, no one could accuse Moutter of putting on airs.
Some analysts have worried he may be too much of a meat-and-potatoes operations man. 
I came away from our hour-long meeting with the feeling that he's got a good handle on the big issues as well.
But as for how that much will make it to his Big Plan, or in what form, we won't know for months.


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38 Comments & Questions

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Mr Keall congrats on a very good expose. Mr Moutter I'm afraid the perception I have is he is a 'seat warmer' till the next round of opportunities elsewhere arises. Startling lack of vision is my take and even worse not a hint of anything entrepreneurial. Steering the good ship Telecom to the next big takeover by another bigger player. The comment over data was the tell all and the analogy over power a bit lame. Electricity is fuel which drives stuff. No consumer would tolerate brown outs and capping of supply. Yet Telecom throttles the movement of communication both in and out, a communication for which alternatives exist even if its via a posted package of paper or getting out and watching a movie. Telecom is utterly unreliable and its relationship with Yahoo is problematic. What is it with the big old monopoly that it like the warehouse could take world class opportunities and fail so badly. Warehouse had AEG and managed to stuff a world leading brand and Telecom failed with Tivo. Too many suits and meetings I'll guarantee. Anyway ...where is Telecom heading? yawn.


I think Moutter's got a very clear-eyed view of where the industry's heading.

Question now is what he does about it.

I'm not making any judgement until his strategic plan emerges in April/May next year.


Well done, Chris. Excellent piece. Just what NBR should be doing.


Not a very dignified headline. You make one of NZ's finest executives sound a little uncouth!


It's, um, a compliment. He's a straight-talker.


agreed, cheap and disrespectful, typical of NZ media these days


Wake up Mr Moutter - A couple of ISPs are already selling unlimited data plans (Slingshot, Kordia).

The horse has already bolted! You will have to try and squeeze more out of your customers some other way.


Telecom used to as well (albeit with throttled data, like Orcon and Slingshot's current unlimited plans).

Moutter doesn't see it as commercially sustainable as service becomes all about the data.


Price on these unlimited data plans are still bedding down. The now duopoly are just gradually lowering the price, to milk profit and keep market share. If you havent noticed, plans continue to come down in price since regulation.

Once prices for unlimited data plans reach a level, where this duopoly will not accept a lesser return, you'll then find differential pricing on large scale data usage.

One things for such, the demand for use of the giga bits is increasing exponentially, and doesnt Sam Morgan & Dotcom know it! These guys should do a Moa listing; but maybe call it "Aoteroa", as I for one would be interested in competing with the Southern Cross Cable monopoly.


The analogy with power may be fair, but the problem is that Telecom is selling Milliamps and the customers want Megawatts


Not sure it's fair a to call a 150GB or 500GB cap 'milliamps'. 500GB would allow you to download 60-odd HD movie downloads a month...


average usage in the USA (with unlimited plans everywhere) is around 40-50GB per month. Telecom's plans are 30GB, 50GB, 150GB and 500GB. that's enough 'power' for almost anybody to need.


Isn't part of the problem here about consumption and provisioning? If you were to graph groups of users by consumption, on the demand side, a small number will consume a lot of data, most people will consume an "average" amount" and a few will be light users. In this case, a one price uncapped plan means that light and medium users cross subsidize heavy users assuming that prices are more or less cost-based (ie, if competition and/or regulation are done correctly and I know that both of those are BIG ifs). I for one would prefer to pay for what I use in general, and I prefer not to subsidize others or be subsidized by others ... (oh wait .. this is New Zealand isn't it ... so the second leg of that might not be generally acceptable to the rest of you!)

On the provisioning aspect, in an unlimited plan world, the law of large numbers suggests that if you have enough consumers, you will be able to predict the shape of demand well enough to build your infrastructure and delivery platforms to provide an acceptable user experience. There is a trade-off between investment in broadband infrastructure (for a whole bunch of detailed reasons) and user experience. You do get what you pay for, depending on the way costs are spread across all users, and no-one likes to feel like they are paying for something they are not getting. Consider this ....

We have a comparatively small user base by overseas standards, and a small number of scale residential service providers using a small number of wholesale providers, spread over 5 or 6 comparatively populated urban/suburban areas and about 35%-40% spread across the rest of New Zealand. Density, distance and labour costs are key cost drivers in pretty much any service infrastructure from power, telecommunications, road, rail, banking, etc .... In other words, provisioning for a high quality of service for uncertain levels of peak demand and timing of demand is expensive. Every ISP engages in some level of what is called traffic shaping - modifying the service level to manage demand. Every power company does the same. Tariffs also play a part in many network industries, with peak rates in shifting non-time dependent demand to off-peak periods. Peak hour traffic places a cost on people who choose to travel at those times by increasing the trip time. (oh ... I forgot ... people complain about that too and want more bigger and faster roads ...... just as well they pay for the roads invisibly because they hate the idea of toll roads ... but aren't those a bit like data caps?)

Since sarcasm is out of style, back to the other points at hand. Be very careful of international comparisons of costs. We live in a small remote country with relatively low national wealth and relatively high labour costs. This translates to a difficult problem in designing and costing provision of infrastructure services generally, and telecommunications in particular. Something like a million subscribers use DSL, and another 500K use cable, fibre dial-up or wireless. This is something very roughly like 2/3 subscribers on DSL. A little under 80% of those subscribers have caps between 5GB and 20GB. Most recent median household income estimates by Statistics NZ suggests that the median weekly income from all sources, including Government transfers, is $1304. Of the roughly 1.65 million households in New Zealand, Sky estimate a penetration of about 50%. Any telecommunications service provider not owned by the State has to make a return on its sunk investment to stay in business, earn enough to continue to unvest in the face of current and future expected demand, and not build more than it can make a reasonable business case for. This is one reason why the Government (irrespective of which party) has incentives to provide financial support to the building of a fibre network. This is why, historically in New Zealand, national and local government have in the past provided or supported most of these infrastructures.

Some internet providers may wish to offer non-capped plans, but I would take a bet that an accurate model of costings would show that while they may attract customers, most of them might not make an adequate return on and of the investments made through the supply chain. If this is true, it suggests to me that other customers on caps are paying more than they should be in order to provide an adequate actual or projected return to the investors. A properly constructed unlimited data plan might be more expensive than the most vocal consumers think. Just be careful what you wish for.

Broadband caps, like any other prices, are a way of signalling underlying costs to users. Money is used in our economy as a way to ration goods and services according to the value that consumers place on them, and their ability to pay, and to ensure that a competitive provider makes an appropriate economic return on its investment. Data caps are simply a way of doing this in the broadband world. The similarity with power pricing is similar. The only difference is that we generally regard base power consumption as a necessity of life in New Zealand. In economist language, the elasticity of demand for power is likely to be inelastic incomparison to the elasticity of demand for broadband.

Broadband prices/plans elsewhere in the world are not necessarily an adequate guide to what broadband prices/plans are or should be in New Zealand. We all, including this Anonymous, want a great deal, or even something for nothing. I'm not sure that the proponents of all you can eat broadband are really thinking beyond their personal wants and into the real world - sorry folks, but someone needs to tell you that it is all a bit more complicated than that.


Hmmm, like some of his predecessors, the vibe I get from this is, he doesn't seem overly customer focused. It's all about his stakeholders and profits, minus the customer. Sure there's a few token comments, but really, for Telecom to succeed in future, they need to be all about their customers... and mean it. Plain and simple. It's the reason we left Telecom, albeit to hook up to UFF.


We were affected by the recent officemail problems and are now in the process of exting Xtra as a provider. That lame and weak kneed
Apology bulk mailed to us is a reminder of the challenge he faces in his own camp and that if weak management who are simply not passionate about customers. Telecom future really doesn't worry me, I voted with my feet. Telecoms future is to be a commodities as after 20 years they simply failed to
Differentiate on service. I would buy them
On price, but the relabilty is the issue as the demonstrated less than two weeks ago


Great interview.

Wouldn't it be great if New Zealand had a technology plan so that companies could work together to create the platform for New Zealanders to build export businesses.

Some thoughts I had ...

1. This article further validates that UFB and content are keenly related. For UFB to be successful getting content onto the IP networks at a $99 per month triple play price point just needs to happen.

I hope Amy Adams and Craig Foss are having coffee to sort this major issue out. Getting content to New Zealand unblocked is good for consumers, Telecom, Chorus, new providers and even Southern Cross (though maybe not Sky).

Is Telecom pushing the Government to assist on unblocking content? It sounds like they are going on their own. Does this mean content becomes vertically integrated into your Telco? That would be a terrible outcome for NZ.

2. Chris would have been good to ask Simon about his plans for Southern Cross which seems awkwardly placed in Telecom. Is Telecom's share of SX for sale? What is the life of the cable before further substantial investment is required? What would it cost if their share of the cable was rolled into a PPP so that capacity can be opened up?

3. What does Simon think of the idea of Crown Fibre Holdings putting out a tender for per connection charging for international to complete the wholesale ratecard? Wouldn't that stimulate UFB?

4. Suggestion for Telecom. When we leave Auckland Airport we seem to stop being a customer. Could we have a service that seamlessly provides overseas sim cards to control costs when we travel? Be great if calls routed automagically or at least messages sent to email. Just a small amount of work could reduce a major stress for many customers. Pick up your SIM at the airport. I'd pay for that.




I would like to know what they are going to do with mobile. With Telecom and vodafone both bleeding customers to 2 degrees when are they going to do something about mobile pricing.


Excellent interview.

I agree with Moutter's view on industry future. For those companies, possibly including Telecom, who choose mainly to sell Gb, either via 3G/4G or over fibre, these are undifferentiated commodities. However, the demand side for those commodities will get quickly move to a view that Gb are essential, similar to electricity or water. Consumers will have so much of their lives tied up in Gb that being without will be seen as similar to being without electricity - no practical substitute in the short run. We already see this.

That increases the risk of government regulation. And we know from the past 20 years or so that NZ governments have done a terrible job of industry structure and regulation in electricity and to a lesser extent water. Terrible from perspective of both consumers and companies in those industries.

This suggests that if Telecom focuses on selling undifferentiated Gb as its core business, investors should expect a business suitable for "widows and orphans" - an old fashioned utility. This means slow growth over the long haul, dependent largely on consumer uptake of new devices that require Gb. It also likely means government oversight of the business.

That's not all bad for Telecom, but probably not a business that many in NZ would expect.

But Moutter still could tilt his strategy away from undifferentiated Gb and towards higher risk content, or even other unexpected possibilities. We shall see.


It is coming up to one year of the 'new' Telecom. After years of complaining about the shackles of regulation and the freedom of structural separation, nothing has really changed. To spend another six months drawing up a grand strategy means missing out on tactical opportunities in the meantime.

The first such opportunity is to position Telecom against a future Vodafone+TelstraClear. Vodafone is going to be distracted by integrating systems and will be tempted to focus on recovering its purchase price of TelstraClear by aggressively unbundling the copper local loop.

This gives Telecom a window of opportunity to position itself as the fibre company. The first mover advantage (excluding the smaller RSPs) could be game changing. While it is right that early adopters are people Telecom doesn't want to risk, the reality is that early adopters are the ones who will be most tolerant of hooking up to fibre.

The second tactical opportunity is rural broadband. If Telecom doesn't move now, it will give Vodafone a clear run with RBI dollars funding extensive increase in Vodafone's coverage area.

It's interesting that Simon talks about Telecom selling GBs. That's exactly what Internet people have asked of telcos, to provide dumb pipes, and what telcos have resisted. Undifferentiated services necessarily means competing on prices (service still isn't a differentiator). With Telecom's costs structure, cost-based competition is a race to the bottom.

In my opinion, content will not be the differentiator for a telco. It will be value-added services. Telecom has two great advantages. First, an ability to leverage its ICT strengths to deliver consumer-grade, consumer-friendly cloud services based in NZ. The second, provide a network that allows smart devices to integrate mobile, wifi, and landline. In addition, telcos the world over have an opportunity to provide network-based services to app and over the top content providers.

None of this is news for Telecom. Yet they have surprisingly decided to wait 18 months after separation to get a move on. That could well be something they will look back in the future with regret.


I agree - ponderous and clueless.


Value added Services that people pay for are what is making money, not gigabytes. No wonder telecom is so utterly useless at adding value. The sooner some of these brain dead senior managers are shown the door, the better off tele om shafeholders will be. Sadly it is the real doers who are being laid off whilst an increasingly out of control and unaccountable management team who lack vision and imagination are killing the company. Mouter please fall on your own sword


I'd just like to be able to pay my internet bill online with telecom ... I mean seriously how ridiculous is it that you can't pay you internet bill online with the company that provides the internet ! ... bunch of dinosaurs used to running big fish monopolies in small ponds ... the world is changing and I for one will be glad to leave them in the tar pit


I pay my bill online every month, through my internet banking...


Err I pay my Telecom bill online... it can be done.


A partnership with the likes of itunes or netflix is the way to go these are the future over the internet and is the lowest cost way to provide an alternative to sky tv and differeniate yourself from the competition.
Quickflix content is way to boring at the moment to entice me to ever pay for it this would change if hbo takes a bigger role in the company in the future.
If telecom just becomes a data and phone reseller there pie will be slowwly eaten by small operators and new broadband resellers.


Eh? have you looked at the quickflix website recently? They get movies on there long before Sky Movies does. Just on their frntpage I see amazing Spiderman (just released on DVD) Snow White and the Hunstman (just released on DVD) the avengers (recently released on DVD). None of those have been on Sky movies yet.
even Netflix doesn't have them yet (I also have a netflix subscription)


change your website its confusing took me 5 mins to find if you had any music apps only found it after google search


Moutter is not being truthful saying he'll address staff numbers when he unveils his strategic plan in April or May. This is already underway with jobs being cut right, left and centre... Rumours are he's ordered GMs to cut their teams by 20-30%...


@# 17 Telecom have a series of rolling restructures underway with each designed to cut around 10%

The morale is bad, motivation is gone and the competition is un relenting. Good luck moutter, you'll need it. Time for something unpredictable and crazy as all the normal avenues for innovation are now blocked


it's true - 10-20% of all staff in head office are being culled this month -just before Christmas.


so there we have it cheaper telco stuff and even fewer people who can afford it. Kind of pointless isnt it


check out Deutsche Telekom for a company with the right strategy they show in their earnings how big entertainment is.


so you want to sell on GB's only

what a backward way of thinking !

if you tried to sell caps in EU you would be dead...

what I wanted is a decent broadband speed to my house, a decent contention rate not some 3rd world class connection,

I live less than 10 mins from CHCH and the service is diabolical.

UFB is a pipe dream for us and RBI would be a possible saving grace.

The Internet is archaeic in NZ - waste of time talking about value added service if the basic service is unusable.

Want to make revenue Simon ... sign up all the people waiting for ports and cannot get broadband... delivery decent speeds and you will make revenue...... as it is I will be off to the first person who can offer me a decent speed (5 mb/s ) to my house and continue delivering a basic but decent service!

telecom's strategy is stuck in the dark ages .. along with their brain dead delivery sister Chorus!


Good to have a straight view from Simon Moutter. It does highlight some concerns.

Sky TV identified a key to maintaining their revenue/margin: Live Sports.

A time sensitive commodity that people pay a premium for. Sky TV invested in developing southern hemisphere Super Rugby franchises, and pay over the odds for exclusive All Blacks and premiere football coverage. The value of the distribution rights drop massively with delayed coverage. Sky sits on a virtual monopoly of real time entertainment. What has Telecom identified as the key to retaining and growing revenue/margin? The tumble weeds are queuing up

Data as a catch all implies that there's no differentiation in data to customers. This is a a return to thinking about the Internet a decade ago, when ADSL was emerging (inconsistent service and capped data you needed a services desk because you didn't have any connectivity).

It doesn't bode well for Telecom Retail as a business and it's staff. Cut back operational costs to be a utility. Slowly reduce Data prices; below the growth of data demand of course, which will counter falling calling revenue.


What I'd live to see is a consumer cloud product that helps to pull together Telecom's fixed and mobile products, and ideally gives unmetered upload/download. Depending on how much traffic that would produce, it would be a pretty powerful proposition and would be very sticky as coming off the service would be a headache.


Simon, obviously no-one will ever agree and even less care what you do with the services and products, but maximise the profits and keep those lovely dividends coming ... that's your job and I think you will be awesome at it. I'm buying Telecom, lots of it!


You dont need a rocket scientist to tell you that Telecom cannot operate as before after CHORUS


Obviously Telecom has been 12 months too late to make any decision, Paul Reynold = Georgy Bush, Simon Mutter = Obama socialist to the rescue for shareholder? .... to make more revenue, net profits... what is your core business? Telco service provider.... what is the next 5 years subscriber behavior? when everyone has data? ... profit stagnant... too short sighted.


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