Clear changes tack as telco market hots up

Friday 31st March 2000

BUSINESS FOCUS: Tim Cullinane says the competition will be in service and products

It's not all about Telecom, departing Clear Communications chief executive Tim Cullinane tells ROB HOSKING

Clear Communications was registered 10 years ago at the Companies Office as The Alternative Telecommunications company.

That original name described the company's position. It was the anti-Telecom. The first carrier to challenge the incumbent's monopoly, Clear at times appeared hamstrung by that role. It carried the burden of all pioneers of being the one with the arrows in its back.

It may also have given rise to the criticism the company wanted to be Telecom, was tackling it head on - and went whinging to the government when it was blocked.

Outgoing chief executive Tim Cullinane, who stands down at the end of June, has overseen a shift in direction in his two-year stint.

"In that period we've gone from a company that was still quite focused on the supply of relatively simple telephony products," he said. "We were also much more residentially focused than we are today."

He said the company was relying increasingly on its own network rather than accessing customers through Telecom's. As well as its own backbone running down the country, Clear had much more cable in the country's main central business districts, he said.

And Mr Cullinane dryly contrasted the recent big-splash announcement of Telstra Saturn's cable rollout with Clear's position.

"What has been announced is an intention to build over a five-year term a network which, when completed, will exhibit the characteristics of the network we have in place today.

"So we are a long way from fazed by it. We have the network in place here and now, we've made the investments, we have the capabilities to deliver product over that network and we are doing so, and we feel pretty pukka about that."

Another recent comment about Clear that has irked was that the Telstra Saturn move, along with Telecom's transtasman moves, left Clear something of an orphan in what was increasingly a single Australasian market.

The increased money Clear's owner, British Telecom (BT), was pumping into the company gave the lie to that, he said. Over the past six months BT has announced a $350 million investment in Clear.

"That's on top of their purchase price. And what that ownership is giving us is access to a very strong international network, particularly through the alliance with AT&T, and access to some very strong products and technology."

When he took over Clear, BT was but one of four owners, each with 25%, "which made for what I'd call an interesting environment at times. The BT takeover has strengthened us enormously."

For example, the firm will roll out remote services using LMDS technology in July, he said. Clear bought spectrum to use the LMDS services - which will allow it to connect directly to customers where it is not economical for Clear to lay cable - and has been conducting joint trials with BT over the past 12 months.

At this stage Clear has no plans to get into the provision of content - which seems to be an implication of both the Telstra Saturn merger and Telecom's recent buy-in to Sky TV owner INL.

What Clear is focusing on is provision to businesses. Here both its internet arm, Clearnet, and the recent cellphone alliance with Vodafone are key. "We're looking at both the larger corporate and the small to medium businesses, and the aim is to displace Telecom handsets." The competition would be on service and product range, not price, he said.

There would be far more integration between Clear's mobile and internet capabilities - again, drawing on the expertise of its parent in this area.

But all this does not mean everything is rosy for Clear. From the government inquiry into the industry Clear still wants two things: Telecom to hand over the telephone numbers it says it owns and to make its local access network open to competitors.

After he stood down at the end of June, he would continue to work with Clear as a consultant, he said. The BT takeover has resulted in Clear being run on a management line basis rather than with an independent board. "Therefore at the time of the takeover we agreed I would oversee integration of Clear into BT organisation but it was clear to me I would want to move on."

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