AAPT only half-priority for new chiefs

update The new bosses of troubled telco AAPT will split their time between Australia and New Zealand as the company's Kiwi owner, Telecom New Zealand, applies a shared accountability model it claims has worked wonders in its homeland.Telecom's chief financial officer Marko Bogoievski and chief IT Services Officer Mark Ratcliffe will jointly manage the company from March, it announced this morning.

update The new bosses of troubled telco AAPT will split their time between Australia and New Zealand as the company's Kiwi owner, Telecom New Zealand, applies a shared accountability model it claims has worked wonders in its homeland.

Telecom's chief financial officer Marko Bogoievski and chief IT Services Officer Mark Ratcliffe will jointly manage the company from March, it announced this morning. It said the services of AAPT chief executive Jon Stretch was "no longer required".

Marko Bogoievski
Marko Bogoievski

Phillip King, a spokesperson for Telecom, told ZDNet Australia the changes wouldn't be too drastic for Bogoievski and Ratcliffe.

"They'll split their time between Australia and NZ as they do today," said King, who claimed that AAPT's current executive team wouldn't be affected as a result of Stretch's departure.

King denied Stretch was leaving on his own initiative and said the move was solely related to planned restructuring that would see "a refinement" of AAPT's existing market focus towards two distinct customer groups -- mass market/small business and large enterprise.

"We've been heading that way already, but we've had nonetheless two businesses here looking after large customers, one sitting within AAPT, one sitting within Gen-i Australia," he said.

"We're really bringing those together, and looking to strengthen our trans-Tasman product offering as well."

Gen-i is Telecom's trans-Tasman ICT services business that employs around 1,500 personnel, with a sizeable number in Australia.

King denied splitting their time would make Bogoievski and Ratcliffe less effective operators: "What we're really applying in Australia is how we run the business in New Zealand".

"No one person runs New Zealand, that accountability is shared among a few executives, backed up by a strong general management team.... It's where you sort of manage decisions on a joint basis with the whole of the executive team's involvement," said King.

King said the model has worked "very well in New Zealand" and he was "unaware" of job cuts at AAPT that were rumoured to have been carried out in the past several weeks. He also declined to reveal Stretch's leaving entitlements.

The reaction
Telecommunications analysts agreed the customer-line restructuring made sense.

"The focus they are now putting on the corporate and medium-sized enterprises, particularly regarding integrating services for that market, is very much in line with the trends we're seeing in Telstra and Optus at the moment," Ovum senior analyst David Kennedy told ZDNet Australia.

"They seem to be positioning themselves to strengthen their competitive position in that marketplace.... This is all very consistent with the kind of announcements Telstra has been making in its strategy last November, the emphasis on better integration of services for sophisticated customers," said Kennedy, who added: "And it's consistent with Optus' purchase of AlphaWest in the IT services market as well."

Market Clarity chief executive and analyst Shara Evans said AAPT had already been moving down those lines.

"From an organisational perspective, in terms of splitting the day to day operations into mass-market and customised or managed business solutions, that makes perfect sense, and I would say that in many respects, AAPT has already been operating in that manner," she said.

"This new structure would also imply to me that there are a large number of cross or trans-Tasman customers."

However Evans questioned the reasons for Stretch's departure: "This sounds like a lack of confidence in the local management.... Certainly by eliminating the Australian CEO position, I would imagine that it is fairly clear that there is not a whole lot of confidence there."

"It would seem to me that if it were just unhappiness with an individual, say Jon Stretch's performance, then the individual would be replaced, rather than the position itself," she added.

Evans also highlighted dangers inherent to AAPT's new management style.

"I suppose there's a bit of a problem when an organisation tries to make all decisions by consensus," she told ZDNet Australia . "Sometimes just reaching consensus is harder than most."

She also said it was unclear how many of AAPT's decisions going forward would have strong Australian input.

"The danger there is that the team that makes the decisions in New Zealand may be slightly out of touch with the way business or mass-marketing is done in Australia," she said.

That sale
Evans also speculated about what Stretch's departure could mean for any potential sale of AAPT, which Telecom New Zealand reiterated today is still being considered.

The kiwi telco announced in mid-December it would review merger, divestment or retention options for AAPT in a review starting late January, which is due to complete any time now.

"Does this mean that they haven't found any buyers, or does this mean that they haven't found any buyers at the price that they want to sell it for?" asked Evans.

"The speculation goes like this: if an organisation were purchasing AAPT, generally they would like to have the choice of keeping or transiting out the current CEO, but they would generally choose to have a person as the liaison as it's going through the transition period."

"Or, does it mean that there's a buyer for one or the other segment, and this is a way of restructuring before a possible sale?" she continued.

Optus is widely considered the frontrunner to buy AAPT. The nation's number two telco bought Virgin's mobile phone customers in early January.