Telstra stalwarts to lead NBN Co

Mike Quigley and Doug Campbell's long-standing relationships with Telstra — and few of its rivals — will lead Australia's telecommunications industry to question privately whether Telstra will receive a phenomenal level of access to the NBN decision-making processes.

renai-lemay-zdnet-australia

ZDNet.com.au
news editor
Renai LeMay

commentary It may surprise some, given Telstra's acrimonious relationship with the Federal Government, that Messrs Rudd and Conroy have picked two executives each with a long-time association with the telco to lead the National Broadband Network implementation.

It shouldn't.

The reality in Australia's telecommunications industry is that virtually every executive with any real experience has spent some time either within Telstra's ranks or working directly with the company in an external role.

This simple fact is driven by the industry's history; the doors were only opened up to early forms of competition back in 1981, with much wider deregulation ushering in a string of new telcos and real competition as recently as 1997. Most of the upper-level executives (and many of the founders) of Australian telcos operating today stepped directly out of Telstra into competing roles.

And yet, the appointment of Alcatel-Lucent veteran Mike Quigley and revered former long-time Telstra Country Wide chief Doug Campbell to lead the NBN Company nationwide and in Tasmania respectively will still ruffle some feathers amongst those who do not work today for Australia's former monopolist.

On paper, the pair are perfectly qualified (even over-qualified) to lead the implementation and operation of the National Broadband Network. And, given the antagonism created by American executive Sol Trujillo during his time at Telstra, it's nice to see the government tick the "made in Australia" box for its own company, despite the fact that both were actually born overseas.

But it's important to realise that in practice, they have little experience in dealing with the non-Telstra aspects of Australia's telecommunications industry.

Campbell has long been revered by the rural segments of Australia's population as somewhat of a champion and saviour of the bush. As the founder and long-time group managing director of Telstra Country Wide, he has spent much of his career focused on trying to extend telecommunications services outside the metropolitan footprint.

In practice, they have little experience in dealing with the non-Telstra aspects of Australia's telecoms industry

As many will note, this has been a laudable push that has earned Campbell the Order of Australia plaudit.

However, it can be argued that such a career has not positioned Campbell well to negotiate the treacherous and competitive environment that is Australia's modern telecommunications landscape: a landscape primarily focused, as much as everyone hates to admit it, on metropolitan areas.

There just isn't much real competition for Telstra in the bush, even in larger cities like Broken Hill (your writer's former home town).

Tasmania is especially seen as one of the last large areas of Australia in which Telstra remains extremely dominant. It was only this month that the state received competitive backhaul services across Bass Strait, and residents of the Apple Isle are only now starting to see the investments in ADSL infrastructure from rival ISPs like Internode and Netspace that mainland metropolitan Australia has enjoyed for many years.

In Tasmania, telecommunications still means Telstra.

For Quigley's part, his former company, Alcatel-Lucent, has virtually tied itself in Australia to the fortunes of Telstra for many years. Some would argue that the French company is the most important to Telstra of any of its suppliers ... and this is saying a lot when you consider the billion-dollar contracts Telstra has inked over the past few years with the likes of Ericsson, Cisco, IBM and others.

In January, Alcatel-Lucent admitted it wasn't looking for work with other bidders for the government's initial $4.7 billion NBN tender, despite its partner Telstra being thrown out of the process several months before.

No doubt Alcatel-Lucent's rivals saw that as a staggering admission ... can anyone imagine Cisco, for example, refusing to bid for work with Optus, despite its own Telstra connections?

Back in May 2006, Quigley himself came out as a strong backer of Telstra's then-fibre-to-the-node NBN plans, panning a rival proposal from Optus, Macquarie Telecom, PowerTel, Primus, Internode, Soul and TransACT that would see an NBN cooperatively built, and even going so far as to echo then-Telstra CEO Sol Trujillo's aggressive stance towards the industry regulatory regime.

Quigley's Telstra relationship goes back far enough that he even acknowledged it in an Australian Financial Review article published this morning.

For Quigley's part, his former company, Alcatel-Lucent, has virtually tied itself in Australia to the fortunes of Telstra for many years.

"I've stood in their [Telstra's] exchanges many, many times in the middle of the night doing upgrades for every kind of switch known to man," he said.

Despite its apparent lack of interest in working with Telstra's rivals, Alcatel-Lucent's Telstra ties still appear to be paying off — in calendar year 2008, the company's local revenues grew by $43 million to reach a total of $861 million. Admittedly, a contract with dominant NZ player Telecom NZ played its part.

All of this will lead the telecommunications industry to question privately whether Telstra, courtesy of its extremely long-standing relationship with both Quigley and Campbell, will receive a phenomenal level of access to the decision-making process around the NBN.

It's unlikely that Telstra's rivals will publicly point out the uncertainty that will run through their ranks at the prospect of having to deal on a daily basis with NBN executives who have such strong relationships with their arch-nemesis Telstra.

The traditionally strong debate in Australia's telecommunications industry about the way forward is currently suffering from a "chilling effect" due to the uncertainty around the NBN implementation and the regulatory regime.

Many telcos and ISPs are currently afraid to publicly speak out about their real concerns and desires, due to the potential to create the sort of acrimonious relationship with the Federal Government that Telstra has been famous for, and thus alienate themselves from any influence in the NBN process.

But there is no doubt that Quigley and Campbell will have their work cut out for them. Both executives will be forced to work extremely hard to build bridges to executives at Optus, AAPT, iiNet, the Australian Competition and Consumer Commission and more if they are to cement their credibility in an industry that has long been hostile to Telstra.

Communications Minister Stephen Conroy will also need to take steps to convince the industry that the new conciliatory approach by Telstra CEO David Thodey hasn't made Telstra and the Federal Government bosom buddies once again ... a situation that represents the worst nightmare of every other company.

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