Moutter makes his mark with his Telecom NZ reinvention

In less than a year since taking the CEO mantle, Simon Moutter has already changed Telecom New Zealand forever.
Written by Darren Greenwood, Contributor on

A couple of weeks back, I made a closing comment that it was all go at Telecom.

New Zealand's incumbent telco has been having a busy time with announcements concerning 4G, Ultra-Fast Broadband (UFB), and mass redundancies.

This week, a Computerworld NZ editorial spoke of a "reinvention" of Telecom. Editor Sarah Putt opined how the company is making fresh appointments at the highest level, it is building major datacentres, and has been eyeing up a purchase of hosting company Revera.

But this is barely the start of it. Dig deeper, and you will see that Telecom is planning something of a strategic overhaul, a major shift in company direction.

It was about this time last year when it was announced that Simon Moutter would be Telecom's new CEO, in place of Paul Reynolds, though he didn't formally take up the role until several months later.

In his first interviews as CEO, Moutter said he planned a more assertive Telecom, and first mentioned a "strategic plan" that we get to hear about next month.

Moutter had barely got his feet under the table when he delivered a major announcement to end "bill shock" for travellers: That of having fixed daily rates on mobile data.

As I said last year, Simon Moutter is known as a hard man, but he may just be what Telecom needs as it grapples with change brought about by the new structures that regulators forced on it so it could gain a major share of the UFB work, as well as the unbundling of the local loop and related initiatives several years previously.

Indeed, it looks as if Telecom might be in for another split, with the company's chief technology officer saying that Telecom is looking at splitting into two distinct parts, currently dubbed "Servco" and "Netco".

Netco would be responsible for network, technology, and operations, while Servco would comprise the customer-facing businesses; mainly, Gen-i and Telecom Retail.

However, Telecom has since rejected the conclusions of this leaked paper, saying Gen-i and Telecom Retail would remain separate business units, and there would be no head of Servco.

But this is all just the usual restructuring that New Zealand seemingly endures endlessly.

More significant is the shift in company direction that Moutter has trialled in other recent announcements.

In March, Telecom announced a Digital Ventures Team that would look at offering new online services, which might even include a local variant of Netflix.

Here's what Simon Moutter said at the time:

As we have previously announced, Telecom is making a strategic shift to a future oriented, competitive provider of communications, entertainment, and IT services over our networks and the cloud. It won't be enough for us to become just cost competitive, we also need to identify future revenue generating opportunities that are arising in a rapidly changing world. Telecom Digital Ventures is an important step along the way.

A week later, Telecom announced a new chief financial officer, with Moutter saying:

[The CFO] will be a welcome addition to our leadership team as we accelerate our strategic shift to become a future-oriented, competitive provider of communication, entertainment, and IT services delivered over our networks and the cloud.

Indeed, even his early interviews spoke of a new "strategic plan", which we now hear will be revealed to investors on May 16.

Judging by how Moutter has performed, with other announcements including a winding down of Gen-i Australia, it is certain that a reinvention of Telecom is underway. I expect he will have something significant to say on Investor Day, too.

In less than a year, Moutter has made his mark on Telecom, he has put his foot on the business, his hands around its throat.

Reinvention might be too mild a word; it could be nothing short of a revolution.

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