Controversial boss of Telecom's Skinny Mobile is out

UPDATED 3pm: Skinny takes a sudden turn toward meat-and-potatoes marketing.

UPDATE 3pm: A source has told NBR ONLINE that departed Skinny Mobile boss Paul O'Shannessey had "a gun to his head" over poor sales.

LATEST: Telecom names new Skinny boss

He is also said to have objected to taking Skinny's marketing in a more meat-and-potatoes direction.

And, certainly, a full page add in the NZ Herald today – pictured – is very straight forward compared to Skinny's edgy earlier, edgier imagery.

The ad would have cost $34,000 at the Herald's full rate card, or $20,000 if it fell under Telecom's bulk discount, a media planner told NBR.

In November this year, soon after his appointment, Mr O'Shannessey told NBR he would not use a traditional ad agency but rather "youth-source" marketing – tapping young people, and Skinny's youthful inhouse team, for ideas.

Today's ad looks more middle-aged Dick Smith retailer-sourced.

But Mr Gourdie maintained there had been no change to Mr O'Shannessey's approach.

"The ad, like pretty much all the marketing activity for Skinny, was created by the Skinny Team themselves," Mr Gourdie said. He added that the DIY did not extend to Skinny's TV ads, which are created by Saatchi.

"It is straightforward, no-nonsense price ad because as the Skinny guys say 'we have stripped out all the fluff', including fluff around communicating the price."

The Telecom retail boss won't say how much money had been spent on Skinny.

He did say that the Skinny budget was "in line with their 'Living Skinny' philosophy which is why they use recycled ads and, in digital, develop their own content. Check out their Facebook site for more insight on that. We want to put the investment into the value we offer customers not huge budget marketing campaigns".

Skinny now has 80,000 Facebook likes, which it says is more than any other New Zealand carrier.

Another interesting element of today's full-page Herald add is the prominent line "Uses the XT Mobile Network".

When Skinny's website first launched you had to wade pages into the site, deep in the terms and conditions, to find any mention of Telecom, let alone another Telecom service like XT.

Analysts then said it was all the better to give Skinny free rein to push budget deals without tainting the more premium XT brand – which, to complicate things, Telecom has begun to move away from.

Now, it looks a little like Skinny is being absorbed – at least a little – into the mothership.

On this point, Mr Gourdie said Skinny started name-checking XT in its ads about a month ago.

"Our customers wanted to know what network Skinny uses," Mr Gourdie said. (NBR also encountered retail staff and shoppers who were unsure if Skinny was a flakey start-up or had heavy-duty corporate backing.)

"It was a common question on social sites so we now tell them."

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9.45am: Telecom has just issued a media statement confirming Paul O'Shannessey's departure as head of Skinny Mobile. No reason is given for his departure beyond the anodyne "Paul is off to pursue other opportunities".

Separately, Telecom Retail chief executive Alan Gourdie told NBR ONLINE his company would not release any customer numbers for Skinny until it full-year results announcement (due late August).

Mr Gourdie would say how much had been spent on Skinny, citing commercial sensitivity.

Skinny would be maintained as a separate brand.

"I will announce Paul's replacement in a few days," Mr Gourdie said.

The acting head of Skinny is Telecom programme manager Paul Touhey.

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8.30am: Paul O'Shannessey has left the building.

Last night, a reliable source told NBR ONLINE that Mr O'Shannessey had been "ousted" as head of Telecom sub-brand Skinny Mobile.

This morning, a Telecom spokesman had no immediate comment beyond confirming that Mr O'Shannessey had left the company.

Skinny was commercially launched in January. Analysts said it was aimed at fending off a surging 2degrees, pulling back Vodafone's big lead in the youth market, and attracting budget customers who are holding out on Telecom's old CDMA network (due to close July 31).

Telecom has repeatedly rebuffed NBR queries about Skinny customer numbers.

During his brief tenure, Mr O'Shannessey has attracted a raft of controversy and drama including:

  • Allegations of high staff turnover.
  • Its ultra-youthful marketing team, with an average age of 21.
  • A stoush with 2degrees over Skinny's practice of locking handsets to its network (settled by the Commerce Commission in Telecom/Skinny's favour).
  • Launch delays, including blowing a crucial orientation week deadline.
  • Criticism from analysts for having attractive calling rates, but being slow off the mark with txt and data.
  • Concerns over Mr O'Shannessey's role in e-tailer Hubsta, which collapsed owing $5.6 million.
  • Edgy social media imagery, and graffiti incidents at a Skinny-sponsored skateboarding tournament. 

On March 23, Telecom Retail chief executive Alan Gourdie spoke very warmly of Mr O'Shannessey to NBR ONLINE.

Sources close to Telecom tell NBR ONLINE that Mr Gourdie has been Mr O'Shannessey's key patron at the company, and personal friend.

If so, then it was bad news for Mr O'Shannessey when former Heineken marketing man Mr Gourdie was passed over for CEO on April 23 in favour of buttoned-down Auckland Airport boss Simon Moutter.

Mr O'Shannessey – who in his maverick fashion retained a Vodafone 021 prefix on his number throughout his time at Telecom – did not return calls.

In February, Telecom said 639,000 if its two million mobile customers remained on the old CDMA network.

After a June 13 mobile briefing was cancelled, a spokeswoman refused to tell NBR how many were still using CDMA. 

Telecom wound down an earlier attempt at a youth sub-brand, Boost Mobile, in 2007.

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