TelstraClear ends speculation not with a bang but a whimper

29 Sep 2005

Allan Freeth, the chief executive of New Zealand’s second largest communications company TelstraClear, has confirmed that his company is scaling back its ambitions in the country and in future will target niche markets rather than attempt to become a national competitor to Telecom. Speaking to journalists on Tuesday, Freeth took a veiled swipe at the country’s regulatory policies saying ‘We’re not here simply to be some type of competitive stalking horse or for anyone to suggest that competition is alive and well. We’re here obviously to make money for our shareholders.’ He went on to say that the decision would mean no new investment in fixed line services and the termination of a range of wholesale products, such as line rentals and ‘smart’ phones which are resold in some areas. Instead, TelstraClear will focus on boosting its market share in areas where it already has existing cable networks. The telco offers triple play services over cable networks primarily in the central business districts of Wellington and Christchurch, but also in Auckland, Dunedin and 16 provincial regions. It will continue to resell Telecom products, but only in profitable areas. Rather than see it as throwing in the towel, Freeth said the company’s shift in focus was a ‘get-serious strategy … but it’s also a be-real strategy’. Nonetheless, analysts have greeted the decision unfavourably saying it is bad news for New Zealand and could even lead to Telstra pulling out of the venture.

New Zealand, Spark, TelstraClear