How Paul Broad would fix Telstra

AAPT chief executive Paul Broad won't say whether he wants the top job at Telstra following the departure of Sol Trujillo, but he's got firm opinions about how he would change some of the company's operations.

Paul Broad (Credit: AAPT)

If Broad replaced Trujillo, he told ZDNet.com.au during an interview this week, he would stop giving the company's retail division a "free ride" and make its wholesale division the jewel in Telstra's crown.

Drive it hard and you'd get a much more responsive reactive retail business

AAPT CEO Paul Broad

"I have quite a strong view that their wholesale business is very powerful business," he said.

"Their model has been not to bat wholesale, it's been to use their strength to underpin their retail business. Whereas I'm a bit old fashioned... You make your retail business perform against the competitors — don't give it an easy ride. Drive it hard and you'd get a much more responsive reactive retail business."

Broad thought that Telstra should look more to leverage the infrastructure it had, which has been his modus operandi with AAPT. "We're very happy to do business with anybody who wants to use our assets," he said, pointing to his relationship with Vodafone and Hutchison for backhaul. "Our wholesale business in this company is incredibly powerful. It's by far and away the most successful part."

Despite his observations, Broad thought outgoing CEO Sol Trujillo had received a bad rap for what Broad considered was a good performance during his time at Telstra.

"I think history will judge his time in Telstra has been very, very positive. I think he's done an outstanding job," he said. "People will criticise how he did it, people will criticise how I did it. People in glass houses should not throw stones. I don't throw stones. I would do it differently. You've just got to accept people approach things differently."

Broad thought that the general opinion that Trujillo had "missed the main game" by allowing Telstra to be excluded from the National Broadband Network was false. "Telstra's always consistently said they'd invest as adds value to shareholders," he said. "They weren't going to be part of it unless the rules were pretty clear. I don't have any problem with that."

He even went as far as saying he would have likely done the same thing in Trujillo's shoes, although "in a nicer way".

"I'm an Australian. So, I think Australians, we fight hard in the field then afterwards we go and have a beer and put an arm around each other," he said.

Broad wouldn't comment whether he would like a chance to tilt for the top position now Trujillo was on the way out, although he admitted that he had been interested in the job before Trujillo nabbed it.

Back to AAPT
The executive's focus at AAPT is currently on completing the migration to AAPT's billing platform Hyperbaric and moving customers onto its revamped IP network, into which it has pumped $30 million.

Half of the customers have now been migrated onto Hyperbaric. The migration had been restarted late last year after being suspended following faults in the system which made angry customers swamp call centres.

The company was taking it slowly now, Broad said, and would finish after the next 12 to 18 months. He admitted that the company had taken a hit to its consumer division because of the botched start to the migration, but pointed out that Telstra had encountered similar problems. He believed getting rid of the legacy systems had been completely necessary and that even in hindsight the move was the right decision.

Australians ... fight hard in the field then afterwards we go and have a beer and put an arm around each other

AAPT CEO Paul Broad

As for the IP network, which AAPT has been working on for 15 months, the core Cisco routers have been put in and the company is now working on the edge routers. AAPT is currently in the progress of moving its customers from other external networks onto its own network.

Having its customers on its own equipment doubles AAPT's margins, Broad said. He expected to see growth in this area; AAPT was going to capitalise on its investment by starting a new marketing campaign in the business segment soon.

Broad was not the only one who felt positive about AAPT's prospects. Pacnet has said publicly that it has its eye on AAPT for acquisition, but Broad reiterated that AAPT parent Telecom New Zealand has made it clear that its subsidiary is not for sale.

Broad considered the offer a good thing. "I really love it when people want to buy us," he said. "I'd rather be that than when they want to sell you. Usually when they want to buy you they're thinking good things about you," he said. Yet he wouldn't comment on any synergies Pacnet might realise with AAPT.

There have been whispers that Pacnet might not be looking to buy, but be bought as in the case of Powertel, however, Broad slashed hopes in that direction, saying that he didn't see any value in purchasing the company.