How Paul Broad would fix Telstra

How Paul Broad would fix Telstra

Summary: 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.


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

Paul Broad (Credit: AAPT)

If Broad replaced Trujillo, he told 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.

Topics: Telcos, Broadband, E-Commerce, AAPT, Telstra, NBN

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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  • What a joke!

    What a joke! AAPT has been a basket case for years, bleeding its parent company dry. Yet this bloke has advice for the company that has trounced his?
    What a joke!
  • By their deeds you shall know them.

    At least he has got a truthful and honest evaluation of Sol not like the group of retarded chimpanzees that work for the Australian Press let by that legendary simpleton Michael Sainsbury.
  • Nonsense

    Unlike your ridiculously biased and blinkered opions, Sydney?
  • re Sainsbury

    Good to see a balnce report on Sol instead of the personalized tripe from Sainsbury!!!

    The Australian should be renamed the UNaustralian thanks to Sainsbury & co!
  • Sainsbury

    Sainsbury is a journalist, not a marketeer - so why expect marketing hype from a journo?? I've read Sainsbury for the past 10 years and seen him sink the boot to all the telcos, not just Telstra.
    Broad is a telco CEO who has relied on Telstra wholesale to be able to run his business - big suprise that he'd focus on wholesale!!
  • Broad is a investment bankster not a mgr or telco person ...

    ... only thing he knows how to do is craft a deal, not fix AAPT obviously.
    We have seen what happens when unsupportable asset valuations ... you get a bubble ... which pops.
    Presumably TNZ/ AAPT is still a part of the Optus led G9-x stable.
  • Cut and run

    Because AAPT is doing so well!
  • Sainsbury, AAPT, Broad and Wholesale

    Wow. What invective from the Telstra crowd - has anyone told them Michael has moved on to China. And you can't blame Broad for any shape AAPT is in - it was a basket case long before he arrived.

    The criticism of AAPT and being a wholesale customer of Telstra is wrong. Telstra has chosen to pursue retail market share rather than profit because market analysts don't understand the difference. Telstra could make more money charging a higher premium for its own retail customers and expanding its wholesale base. By chasing share they devalue their brand premium.

    Telstra understood this until Sol arrived. Wonder if they will rediscover it.

    But somehow I don't think road will get the gig at Telstra despite this job applicatio - Telstra doesn't need another absentee CEO.
  • Good riddance.

    If it is true that Sainsbury really has gone to China there is a God and he has answered my prayers. Hope he starts another vile campaign this time against the Chinese business people and the Chinese deal with him severely.
  • Replacement

    Sorry to disappoint Sydney but Telstra will always cop the flak because it controls the telco market in this country and the market is in a very sorry state. Watch the new guard really sink their teeth in over the next few months..
  • Read it all on the Net.

    I wonder if this demonising of Telstra by the newspapers via Michael Sainsbury and Co could have anything to do with the fact that Telstra offers technology that challengers the very survival of the newspapers.

    Newspapers are yesterdays news. The Net is instantanuous and immediate. It would seem that any damage newspapers can inflict on Telstra would be of helpful advantage to Mr Sainsbury's masters.
  • Dear Sydney

    Wow Sydney - you really think newspapers are involved in a giant conspiracy writing stories to damage Telstra because they feel threatened by the Internet?

    A few facts - The Australian is owned by Rupert Murdoch's News Corp which is Telstra's partner in Foxtel. Each of Fairfax, News and Packer (when he still was interested in media) griped about the poor state of broadband because as the controllers of content they see broadband as an opportunity it a threat.

    There is no conspiracy - Telstra just sucks!!!!
  • ...

    actually no, they stepped out a while ago