lunarmedia

Online music market in Australia kicking off

Well the mainstream media in oz seems to be turning a blind eye to the real action going underway in the online music space here. Telstra, the no. 1 incumbent carrier has launched its online music store, but the digital media chaps at Sun Micro tell me the site needs to be re-built because its not scalable and its full of other technical limitations. Unbelievable huh? I wonder how long it will take before some one gets that yarn into the public sphere. Kerry Packer, Australia's media mogul, will launch his online music store via ninemsn.com, while upstart Destra is getting a good rap for its service, though I am told the site's functionality is fundamentally flawed. I have had some recent dealings with the people from Kazaa, and they have gone to ground. Telstra signed BMG and Universal last week but the story hasnt hit the press yet either. All the big media companies here are trying to get their head around the DRM issue, which I confess I don't understand yet myself. Meantime, most online music fans will continue to suck music free of limewire and kazaa. A mate of mine comes home after work and spends hours dialing down tracks off limewire. Hard to see how any money will be made out of online music for a while. I am meeting with a band manager next week who wants to know how to approach the online space. Will provide an update.

New Zealand Telecommunications Review, February 2004


Telstra has started the year facing a storm of controversies and setbacks, all of which has led to increased scrutiny of the leadership of chief executive Ziggy Switkowski.
For one, the carrier has been under siege from the politicians, the IT community and the general public over its decision to outsource maintenance operations to India. Telstra’s explanation was that it was a decision made by outsourcing partner IBM. The carrier did not help its public image by being cagey about the whole affair.
The financial community then mauled Switkowski after he delivered a listless earnings report that showed a decline in overall sales and the effects of stiff competition from other carriers, especially a rejuvenated Optus.
Investors viewed Telstra’s first half profit report negatively, and the shares were sold off sharply. Switkowski was forced to present a growth forecast lower than expectations, and also concede that its Asian data venture Reach may need another cash injection, after he said last year it would remain self-funding.
Switkowski now has something to prove and he appears to be more anxious than ever given the radical changes he has experimented within the carrier in the last two years.
In that period he has implemented around five managerial restructurings and rotated his senior team around in a bid to broaden their experience. His biggest punts were to split the mobile division into separate consumer and business units, and to create divisions based around customer, and not product lines. Then he created Telstra Technology, an internal unit that was formed to serve the needs of all the other parts of the company.
All of those projects have taken some time to digest, and could turn up trumps, except problems within the mobile and Internet operations have taken the gloss off his lofty ``organisation transformation’’ plans.
Telstra is deeply worried by its position in the mobile market and has paid for a raft of reports from external consultants in a bid to work out how to make money by offering zero handset subsidies. However, in the December quarter, Telstra was soundly beaten by Optus, with the incumbent carrier adding 265,000 new customers to the 299,000 gained by its closest rival. Its new head of Consumer & Marketing David Moffat, the former financial director, was simply out-marketed in the crucial Christmas spending season.
Telstra managed to achieve this by blowing its annual mobile promotions and advertising budget of $157 million, exceeding it by $10 million in February.
Meantime, BigPond managing director Justin Milne has dished out $90 million to vendors in a bid to upgrade the carriers email network platform, in the hope of no repeat of last year’s ``meltdown’’, which saw major outages on its ADSL platform. In a shot at accelerating customer numbers, Telstra surprised the market by drastically slashing its basic broadband offer to $29.95 a month, with monthly download limits of 200MB. It came as a complete shock after years of holding the price up at around $65 a month.
Switkowski clearly decided it was time to get on the front foot. He seems keen on making his mark this year, but lets hope he doesn’t get carried away, as he did with his disastrous deals with PCCW.
However, Kerry Packer’s business publication The Bulletin reported on February 17 that Switkowski and chairman Bob Mansfield had proposed making a $2 billion takeover bid for newspaper group John Fairfax. However, their proposal was knocked back by the board, marking a major defeat for the two men.
The story is reminiscent of an earlier ambitious Ziggy idea a few years back when he and his board considered buying the Nine Network for $10 billion. Maybe Switkowski is getting swept away by U.S. cable provider Comcast’s US$66 billion bid for Disney. However Switkowski should be aware that many analysts have decided the Comcast tilt at Disney is over-reaching and unlikely to add value in the long-term. The only rationale for the deal is that Comcast’s stock price is going up, and Disney’s is heading south.
Its also worth noting that Fortune magazine reported recently that Time Warner shareholders are US$42 billion poorer since its merger with AOL in 2000. After losing support for the Fairfax bid, Switkowski needs to come up with a new plan or the pressure on him will only increase.

Duncan Craig

Exchange Volume 15 Issue 14 & 15 - 25 Apr 2003
Article in Industry
Telecom NZ tightens grip on AAPTTelecom New Zealand has made its first decisive moves since appointing chief financial officer, Marko Bogoievski, to temporarily run the operations of AAPT, by replacing one of its top four managers and delaying the launch of its $6 million MPLS network. Bogoievski has replaced AAPT group general manager service delivery, Ian Buchanan, with Telecom New Zealand's Rhoda Holmes, who is currently general manager of network investment in New Zealand. The carrier confirmed to Exchange that Holmes will take on a larger role in Australia, taking responsibility for service delivery and network management. That means all four of the key line management roles are now held by executives sourced from Telecom Zealand. They include head of finance, Peter Crimp; Graham Mitchell, head of business and Internet services; and Smartchat manager, Greg Armstrong. Buchanan's departure is partly a result of the decision taken last year by Telecom New Zealand to outsource management of its networks in New Zealand and Australia to Alcatel. Telecom New Zealand has been aggressively stripping the cost base of its Australian operations, and last year announced it would relocate its network operations centre to New Zealand. Investment banking analysts told Exchange that Bogoievski is assessing the valuations and cost structures of the AAPT business, but they doubted reports that Telecom New Zealand was preparing its Australian unit for sale. That is because Telecom New Zealand would be unable to sell the business for a price higher than its current book value, they said. However, some analysts said that Telecom New Zealand may view Bogoievski's stint in Australia as providing him with valuable operational experience in the event that he may eventually succeed Theresa Gattung as chief executive of the carrier. AAPT executives told Exchange that Telecom New Zealand has also recently clamped down on the decision-making authority of senior managers in Australia, in a bid to keep spending under tight control.MPLS under internal reviewThe MPLS network has already been built and was scheduled to be launched in the first quarter of this year, but the initiative has been delayed as Telecom New Zealand is still assessing its revenue and cost assumptions: the proposal was sent to various divisions of Telecom New Zealand for their consideration. "The network was ready to roll in October but it has since been bogged down in internal reviews so they have not made the next step of developing MPLS-based products for customers" said one AAPT executive. "Telecom New Zealand has taken away all delegated authority for spending and new projects and they are now getting paranoid about consistent losses in market share across all the businesses."A Telecom New Zealand spokesman confirmed that the MPLS network is in place, but said it was still going through the "testing and configuration phase". Gattung said last year that Connect.com, with about 8,000 business ISP customers, was the carrier's best asset in Australia, because it has the strongest growth prospects. It is also the only profitable part of AAPT, which has only reached its near break-even status as a result of a significant reduction in capital expenditure in the past year. Cost cuts cramp innovationAAPT executives also told Exchange that Telecom New Zealand executives were becoming increasingly nervous about improving returns from Australia, because almost three years have elapsed since Telecom paid $2 billion for AAPT. Bogoievski is holding numerous strategy meetings aimed at trying to turn the operations around, but the spending cuts have reduced his options to launch new projects, such as the MPLS network, they said.Bogoievski is due to return to New Zealand after a three month stint in Australia and Telecom has drawn up a short-list of candidates to fill the position left vacant by the previous chief operating officer, David Bedford, whom he replaced. Telecom New Zealand said that a global search was still underway and an announcement expected within the next two months. - Duncan Craig

Exchange Volume 15 Issue 16 - 02 May 2003
Article in Industry
Milne stirs up BigPondIn his most significant move since taking charge last year, Telstra's chief of broadband, Justin Milne, has implemented a management shake-up within the BigPond Internet division, announcing five new appointments aimed at accelerating the growth of broadband Internet users. The management changes were described as "incremental" by Telstra BigPond staff, but they represent the forming of Milne's new management team at BigPond. The staff changes follow Milne's mandate from chief executive Ziggy Switkowski issued last year to add some zip to the business. In an internal memo issued to staff last week, Milne announced five new appointments in the BigPond Internet group, including a strengthening of the team's legal and technical support reseource s. The memo indicates that more effort will be made in branding BigPond, possible expansion moves, and faster product development across all of the carrier's access platforms. The new line-up indicates that Milne wants to expand BigPond into new areas, in a bid to accelerate growth. Milne has handed former BigPond Media Services general counsel, David Waldie, with that task. Focus on growth and partnerships"David Waldie will be joining the group as director BigPond business development," Milne wrote in the staff memo. "David will focus on the growth of the BigPond business both domestically and internationally as well as the development of key partnership relationships with others in the industry." Craig Turner will move into the role of general manager products at BigPond. Milne said that Turner would be "focused on project managing the development and production of products for the BigPond business across all forms of access." Milne also said that "product development is key to our growth strategy and will provide us with a competitive advantage in the marketplace."Leanne Wallis will join the group as general manager customer service, moving across from the customer care business where she was manager Internet service and support. However, the movements in the legal team are intriguing and suggest that BigPond may be looking to enter into new partnerships or alliances. Former Telstra International general counsel, Simon Brookes, has taken on the position of general counsel BigPond Media Services. He previously worked as general counsel in both the Mobiles and Business and Government divisions. Sarah Standen, currently working in the international legal team in Sydney, will join Tania Fryer and Belinda Bates as the core of the BPMS Legal team reporting to Brookes. Waldie, Turner and Wallis will report directly to Milne. This positions BPMS with an experienced and expanded legal team to assist us in executing our growth strategies," Milne said. The shake-up also puts to rest ongoing speculation over the future of the BigPond brand within Telstra. There was speculation in December last year that the carrier might focus on spending more money on promoting the Telstra.com website, but Milne has decided that the BigPond brand is still strong. Telstra now has well in excess of 200,000 BigPond customers.Big promotion for BigPond"The BigPond brand remains relevant and there will now be a significant promotional push in promoting the service," a Telstra BigPond executive told Exchange. It coincides with confirmation from Telstra staff that March was a record month for new broadband customers, with a record 23,000 orders placed for high-speed Internet accounts. That spike in growth has been underpinned by heavy promotion of ADSL self-installation kits sold through Harvey Norman retail outlets. A Telstra spokesperson said the carrier was close to having nearly 300,000 broadband users, and 1.4 million customers overall. The management changes also follow the surprise departure of senior BigPond business development manager, Omar Khalifa, who was given his marching orders two weeks ago after running into some opposition with Milne.However, Milne's appointment, where he is working alongside Bruce Akhurst and Ted Pretty on the carrier's overall broadband strategy, essentially meant that Khalifa's role was no longer required. A former Optus executive, Khalifa joined BigPond nearly two years ago and was instrumental in reducing staff numbers at the Internet business, formerly known as Broadband and Online Services."The place was never going to be big enough for both Omar and Justin, and Justin likes to have people around him that he can trust and manage," said a Telstra executive, who asked to remain anonymous. - Duncan Craig Back
Exchange Volume 15 Issue 18 - 16 May 2003
Article in Industry
Telstra redirects advertising spend Telstra has revealed a significant change in its strategy to retain and lure customers, hiring advertising agency George Patterson Bates to work on CRM and data mining projects, in a move that will see it lessen its focus on big-spending mainstream media campaigns.Telstra announced this week that George Patterson had joined its panel of agencies that provide below-the-line media work, in a contract that will see the carrier outsource key functions such as data analysis and econometric modelling of its customer base. The deal came as a surprise to the advertising industry, which had expected George Patterson to try and retain its existing account with Optus. The company worked on the Telstra account years ago, and is now back in favour. "They are coming back to Telstra and we are pleased because they have a strong track record in the local communications marketing and advertising sector." said Telstra group managing director, Consumer and Marketing, Ted Pretty in a conference call this week. "We will use them to run sophisticated data modelling campaigns."George Patterson's account with Optus is worth around $13 million in fees, and around $60 million in terms of advertising spend. George Patterson is being put up for sale by its struggling parent, Cordiant Communications, which is being tipped to sell the business to Pacific Equity Partners. The uncertainty over the Patterson - Optus relationship allowed Pretty to swoop two weeks ago and convince the company to quit the Optus account. Telstra chairman, Bob Mansfield, also has close connections to Pattersons as he used the advertising agency to launch Optus in Australia 12 years ago. Sources at Pattersons said they expected the Telstra account would be worth more than the Optus account within six months, indicating their belief that the carrier will significantly increase its spending on CRM and data mining activities. In addition, Telstra is due to announce before the end of June which advertising agencies will win its 'above-the-line' accounts, after it issued a tender to the industry asking for specific pitches, reflecting its move to customer-focused segments. Mainstream advertising refocussedTelstra recently made a significant decision to focus its mainstream advertising into seven areas - youth, mobile, SoHo, small business, corporate, consumer, and BigPond Internet. That decision will mean that divisions of Telstra will have to use the ad agency which wins the pitch for each specific segment. Around six advertising agencies have been short-listed to join the incumbent agencies of Singleton Ogilvy & Mather, The Campaign Palace and Clemenger BBDO. "Telstra is looking for cost reductions in agency fees and the advertising industry is pretty cheesed off because the market is very tight," one advertising industry executive said. "They are looking for strategic value from their marketing spend, and their procurement division is looking for efficiencies."The overhaul of Telstra's advertising strategy has partly been driven by reports that Optus tracks ahead of Telstra in terms of "brand likeability", particularly when it airs its television commercials featuring cute animals.Two years ago Telstra's overall annual spend on advertising amounted to around $110 million, but that figure has been reduced to around $80 million. Now, as the battle for retail customers intensifies, the carrier is trying harder to work out how best to sell bundled packages to specific clusters of customers. That means more money will be spent on CRM analysis. Below-the-line spend increasing"If you take the actual fees paid to the agencies we are probably at a situation where below-the-line spending is approaching a similar spend to above-the-line spending, so it's probably approaching parity" Pretty said. "The below-the-line focus will play a significant role in mobile customer acquisition and retention and allow us to look at feature usage and penetration on our fixed network." For example, he said that Telstra plans to launch a new fixed-phone package on July 1, after already undertaking some research on customer spending. Pretty said that Pattersons would supplement Telstra's existing resources. However, it is rumoured that large parts of its CRM and data mining will be handed to the ad agency. He did reveal that Pattersons would provide support to Telstra's internal group, the Emerge Test Center, in a bid to get more of "these econometric and data mining skills into the organisation".Pretty said the Emerge Test Center undertakes data mining activities and uses a number of techniques that perform analysis on its own data. Telstra currently uses NCR and Teradata for its customer data warehouses and Siebel for its business-focused CRM projects. However, Telstra said the re-shaping of Telstra along customer lines was driving the need for improved analysis throughout its retail division. "Since the formation of Consumer and Marketing and the bringing together of fixed and mobile, and the increase in bundled customers, we have accelerated our analysis of our customers, and for example we can see a high correlation between heavy broadband users and high-spending mobile users," Pretty said. "It's about customer lifestyle value and we are now trying to track the preferences of our customers. George Patterson Bates will help us do that more accurately. They have a long track record in this area and they were the first to bring this capability into the Australian market. We will use them in a targeted way in our below-the-line activities. We will move our focus on above-the-line to below-the-line spending." - Duncan Craig
Exchange Volume 15 Issue 21 - 06 Jun 2003
Article in Industry
Telstra Technology to shed staff in shake-upTelstra's job cuts started to take effect this week with its newly-formed Telstra Technology division beginning the process of shedding middle managers in advance of a radical overhaul in the way the company brings new products to market. The restructure of Telstra Technology, the new unit created in January and headed up by Doug Campbell, is part of the carrier's wider cost-cutting drive, but it also reflects the carrier's goal of better using its technical capabilities to drive up revenue across the board.The unit was announced as part of a major internal restructure of Telstra in November 2002. It was formerly the Network and Technology Group and its new role was given as being "to give increasing priority to innovation, new product commercialisation and the maintenance of Telstra's competitive advantage from its world class networks and engineering". "We are in the throes of a restructure and a re-organisation" Telstra Technology spokesperson, Libby Lyons, told Exchange. "In the next couple of weeks we will be looking to fill any vacancies but the restructure will also result in some job losses." She added that the final details of the restructure were yet to be finalised, because senior managers were still working through the process.Flattening the structureThe restructure also confirms Telstra chief executive Ziggy Switkowski's willingness to use the new divisional structure to cut a swathe through the many layers that exist within the organisation, while reducing the factional in-fighting and delays that have plagued the speedy execution of new projects.It also reflects a move by Switkowski to eliminate the old "silo approach" to new projects, under which teams would work in isolation or, sometimes, in competition. When he announced the re-organisation last November, Switkowski said: "Evolution of our structure will also see continuing reduction in management layers, elimination of duplicate activities and reduction of corporate overheads through process improvement".Sources within Telstra confirmed that a number of redundancies were handed out to middle management staff in the technology unit this week. Telstra would not confirm how many technology jobs would be lost, but the shake-up has come as no surprise to insiders who have said the thinning of management ranks was inevitable."The job cuts have started here and quite a few of the middle management techie roles are going to disappear,'' said one executive who works in the Consumer & Marketing division in Telstra. The Telstra Technology unit also includes the Telstra Research Labs operation. Its not yet known if jobs will be shed at the Research Labs.Technology still keyAs the provider of technology solutions to the rest of Telstra, the technology unit is crucial to the carrier's ability to develop new products. The first part of the restructure will see the creation of two new management layers - product infrastructure managers and technology managers."The whole drive behind these new roles is so that we can deliver significant improvements in our customer focus and technology leadership," Lyons said. The technology managers, those executives with considerable technical knowledge, will work with external suppliers to try and develop value-added services for the carrier's different access platforms, while the product infrastructure managers will be charged with the successful delivery of new services. Their prime focus will be to commercialise new phone, data, and Internet products and ensure they can be delivered as 'end-to-end' services.The new structure will be important for senior executives such as David Thodey, head of the business and government unit, who has been charged with the mandate of getting out new products faster, while offering an array of data services for large enterprises and small businesses.Thodey, for instance, is concentrating on developing the new wideband-IP business, which is being geared up to deal with renewed competition from a host of second-tier carriers and multinational providers.The new structure is also aimed at ensuring that the technology unit is better aligned with the company's business unit and infrastructure services product managers, while flattening the organisational structure. The Data and Online unit, headed by Andrew Johnston, will be particularly affected.From ten layers to five"There is a drive within Telstra to get more productivity out of the team structures," said an executive with the Infrastructure Services unit. "The management want to strip down to only five layers of management in some areas where currently there might exist up to ten layers in a particular area. So now the team sizes will probably get bigger and one manager will look after two teams, which allows Telstra to reduce middle management numbers."The recent divisional restructures at Telstra have made it impossible to determine how many pure technology jobs have been lost at the carrier in the past eighteen months. The old Broadband and Online Services team was hit hard by job losses, with most of the 35 staff at its Sydney web production team losing their jobs in June last year. That was driven by Telstra's decision to shut down some of its online content projects.The latest rash of job cuts is bringing Telstra closer to its desired target of running the business with only 35,000 full-time staff. That figure is the estimated number of staff that Telstra could ideally run the company with, according to a number of investment bank reports released in the past couple of years. - Duncan Craig Back
Exchange Volume 15 Issue 24 - 27 Jun 2003
Article in Ex Cathedra
Nextgen: Australia's Global CrossingLast week Nextgen Networks finally bit the dust, with, perhaps, not a single significant wholesale customer signed to the $850 million long-haul data network. Three of its major banking syndicate members lost patience and called in Ernst & Young to act as receivers. How did it all go so wrong? To hardened executives in the telecommunications industry, Nextgen's collapse came as no surprise. The project always had a grand kind of ambition written all over it, similar to the world-beating designs of the ill-fated Global Crossing venture. Indeed, Nextgen was conceived at the same time that Global Crossing was getting international business press for its goal of becoming the largest communications network on the planet.What's amazing is that some of Australia's most blue chip super funds bought into the dream, along with the National Australia Bank, and the most profitable construction firm, Leighton Holdings. The downfall of Nextgen is worth further examination, if only for the puzzling way in which the project got the backing of a group of powerful investors.Pryke should have known betterPhil Pryke, the CEO of Nextgen at the time of its collapse was CEO of the Australian arm of its supplier, Lucent Technologies from conception to contractualisation of the Nextgen project. He should have known better about the risks of betting large sums of money against future, and uncontracted promises. This correspondent remembers clearly the late 1999 press conference with One.Tel, when Jodee, or Brad, said they were going to bid for 3G mobile licenses across Europe. As head of Lucent at the time, Pryke was in that meeting, and he was beaming as One.Tel outlined its vision of bidding for UK and German 3G licenses. The five journalists who attended that press conference walked out shaking their heads in disbelief. Lucent's Australian arm ended up losing a whopping $957 million on the junior mobile carrier.Again, Pryke should have known better. In his earlier career, he carried out a number of political mandates for the New Zealand government, including a stint as head of the newly corporatised Electricity Corporation of New Zealand. Those sorts of roles surely require some level of conservative network planning and investment. Yet when he came to Australia, Pryke got swept up the telecom bubble, as exemplified by the One.Tel disaster.His 2IC at Nextgen, chief operating officer Stephe Wilks, had worked for Optus for a number of years, starting off in a regulatory role, then moving to head the wholesale DSL unit, XYZed. For a variety of reasons, the XYZed venture did not perform, and was rolled back into Optus as part of its wholesale arm.Upon joining Nextgen, Wilks took on some of the public responsibilities of selling the business case to the wholesale market, and to the trade press. He was adamant that Nextgen would have a super-fast state-of-the-art network that would see a number of carriers and corporates jump on board.However, there must have been some element of naivety involved. Nextgen was pushing hard to get Telstra on board in around August and September of last year. A couple of months before Nextgen was due to light up its Sydney-to-Melbourne link, the company conceded that it did not yet have any customers signed up.It was an extraordinary admission to make publicly, and it would likely have provided Telstra with further incentive to hold off from buying capacity on Nextgen and wait to pick up the some of the pieces after the inevitable collapse of the rival network. By the end of 2002, Nextgen had stopped talking to the press, and most network executives were in agreement about its fate - the best outcome would be for Telstra to buy the network for around $100 million.Who will buy?Six months later, it's not at all certain that Telstra will buy the network, or would even want it at that price. Telstra recently announced letters of intent with Marconi (the incumbent technology provider) and with Siemens (the incumbent contracted supplier) for future DWDM network upgrades). Furthermore, Telstra, has indicated that it may lean towards upgrading its DWDM networks through services contracts with vendors, rather than building and owning the systems outright. There is enough capacity in the ground now that Telstra can afford to carefully plan its own incremental extensions, as highlighted by its gradualist approach to moving towards 10Gbps networks (it said recently that upgrades would be made link-by-link as predetermined traffic thresholds were exceeded).Nextgen was a classic "build it and they will come" strategy, over-hyped by its fancy technology, and a supposedly blue-chip line-up of backers: one that surely could not fail. However, those backers completely misread the new dynamics of the marketplace, and believed corporate data traffic volumes would shoot through the roof, enabling them to make millions in the process. In the end Nextgen became Australia's own version of Global Crossing - Duncan CraigBack
Exchange Volume 15 Issue 25 - 04 Jul 2003
Article in Service News
New profile, new content for BigPondTelstra is set to unveil its new BigPond brand at a press event in the next few weeks as it moves to stimulate demand for fast Internet services by offering enhanced video content to support recent initiatives such as its drive to sell more ADSL self-installation kits. Telstra insiders confirmed that a new look BigPond brand would be launched after six months of work aimed at positioning the brand higher in the minds of consumers. Telstra's chief of broadband, Justin Milne, has thrown his faith behind the BigPond brand, which will figure more prominently in the new broadband TV advertising campaign due to be released shortly. "There had to be a change from the central portal model of the early days and this will see us providing a closer intertwining of our access strategy with our content," a BigPond spokesperson confirmed to Exchange. "So we will be reviving our content strategy because we have worked out the right customer price points, and we have had success with the launch of the self-installation kits. The next step is compelling content for BigPond and there will be a briefing on that this month." Significantly that new content will include video streaming of sports events, especially the AFL, NRL, the ABC News service, and entertainment and games. Milne has charged former Telstra mergers and acquisitions lawyer, David Waldie, with forming new content partnerships. That could involve extra information on sports events such as player profiles and statistics. More sports contentThe carrier is now understood to be feverishly working on a number of web sports content deals that will broaden the appeal of its BigPond service. Indeed, Telstra project managers told Exchange that the new look BigPond advertising will only have the Telstra logo included in small print. Telstra will increasingly attempt to make BigPond its key brand for its broadband service. "You can call it BigPond, or call it broadband, but BigPond is now seen as a definite division within Telstra that is a break-away from the rest of the group,'' said one project manager. Telstra first started to promote video streamed events on Big Pond as long ago as 1999, and in October of that year it piloted BigPond TV at a trade show in Darling Harbour in Sydney. However that project never got off the ground because Telstra did not have sufficient cable Internet customers to justify further expenditure. This time around, Milne is understood to believe that Telstra has sufficient customers and to be looking at a number of ways of offering free, or 'un-metered', content on the BigPond website to make it an attractive content destination. Milne, for example, recently ordered the purchase of 60 plasma screens for Telstra retail outlets, as part of a marketing drive to show consumers the pleasures of watching video clips over ADSL. Countering Optus' extra GbytesThe revamp of the BigPond brand has cemented the division's survival in the company after it was suggested last year it could be buried inside the Telstra.com website. However, Telstra seems intent now on combating the success of Optus in its cable Internet marketing campaign. This week Optus said it was reducing prices for its 5Gbyte and 10Gbyte plans, and for its stand-alone customers. Optus has also increased the amount of data that customers are able to download - the 5Gbyte limit has been increased to 6Gbyte and the 10Gbyte to 15Gbyte.In a recent edition of Telstra's internal staff newsletter, Milne revealed that growth in broadband numbers is strong, and on track to reach targets. Indeed, he already controls around $650 million in revenues. He noted that it had taken less than three years for ADSL to be available to about seven million premises, or up to 75 percent of the population. "BigPond Broadband will soon have 250,000 customers," Milne said in the newsletter. "This is an important milestone, as Telstra plans to have one million customers using its broadband networks by the end of 2005, which includes both BigPond and wholesale. And we already have one million plus BigPond dial up customers," he said. - Duncan Craig

Exchange Volume 15 Issue 25 - 04 Jul 2003
Article in Industry
Telstra aims for total service automationTelstra has revealed that it had to undertake a virtual "heart transplant" of its intricate network and service layers in order to install its multi-million dollar FuturEdge project, which, it claims, will transform its performance levels for new services and fault repairs by using new advanced software from an Israeli company. The FuturEdge project was approved by Telstra CEO, Ziggy Switkowski, in December 2001, and initial deployment started last year in Queensland, Tasmania and regional Victoria. In its submission to the Australian Communications Authority last week, Telstra conceded there had been some teething problems with the software that had reduced its overall service performance. In a press release responding to the ACA's latest performance figures, Telstra said that IT related teething problems experienced by FuturEdge had led to inaccurate service work despatch to field staff. However, Telstra said it was on track to install the new system across its Network by the end of the year.In essence, on completion, Telstra will be able to schedule repair jobs almost entirely through the use of computer software. The current legacy systems mean that around 65 percent of service jobs are scheduled manually at the carrier's work management centres, making the scheduling system prone to human error and guesswork.Online orderingEventually, by early next year, Telstra's customers will be able to request a new connection, or advise of a fault, via the Internet, and the carrier will use its new IT systems to schedule the job entirely by computer. It will mark a significant leap-forward in its customer service levels and possibly lessen the political pressure for it to deal expeditiously with priority customers.The project was undertaken in tandem with consultancy Accenture, which provided systems integration services, and at the height of the project 120 Telstra staff worked on FuturEdge. Telstra sourced software from Israeli technology provider, Click, for its new workforce management system, while it used CRM software from Clarity for its service assurance layer. This will effectively bring Telstra's disparate network of customer service systems into one single unit, providing significant cost and productivity gains."This is the first time we have done something like this and we think it will set a benchmark within the telecommunications industry," said FuturEdge project director, David Brennan, who works within the Infrastructure Services division.The challenge for Brennan and his team was to de-couple the 40 existing systems within Telstra and form a new service and network activation layer, without causing serious disruptions to overall performance levels. That meant creating links to its databases on customer records, outages, and phone exchanges across the country. It was a wide-ranging project that affected all parts of the carrier's information systems.Heart transplant"The analogy is that of a heart transplant as a couple of the procedures involved de-coupling the various interfaces from 40 existing systems," Brennan said. "For example, Telstra currently has a large number of different activation systems, and they needed to be linked into the new system."As a result, the FuturEdge team decided to set up the new system as an isolated database that will eventually see all customer requests migrated to the workflow system in a phased program. The existing workforce software and service planning systems run on large national-based systems, and a new single interface had to be created. Telstra deployed TIBCO software to upgrade its enterprise interface architecture, which, in crude terms, acts to bring all the systems together.Telstra is now working on three more software releases by the end of the year, making the work-flow project complete. They will give the carrier "end-to-end" capability, and allow it to track a fault repair from the moment the customer phones the service centre to when the service is restored. The system will also feed information back to front-of-house staff within the Consumer & Marketing and Business and Government divisions, allowing them to provide better customer service.Driven by Priority AssistanceBrennan conceded that Telstra was motivated to fast-track the project because of new responsibilities to meet the needs of the more than 130,000 priority assistance customers that the carrier is obliged to service. However, the project had its genesis in 2001 when Telstra identified ten software solutions that could transform its work management and service assurance practices. It was then whittled down to the Click and Clarity software products.Telstra said the new solutions are as close to "out of the box" deployments as possible, and both solutions have "a lot of latent capability in them", said Brennan."The next versions of Click and Clarity will have extra smarts for us to access," he said. `"This will allow us to maximise the efficiency of our field force by offering them better diagnostic tools and increased automation of processes." For example, Brennan said the Click software was created by a mathematics professor who designed the system to provide dynamic updates when it comes to dispatching the right job.Intelligent scheduling"It can match the skills of the technician to the fault repair job and it also monitors the scheduled job based on the business value of the work," Brennan said. "It looks at how long it will take the technician to get to the site, how long the work will take, and what the priority of the job is compared to others." In addition, it will allow Telstra to provide a specific time that the job is done, instead of allocating an approximate time period. Those features, says Brennan, allows Telstra to meet "its obligations to customers and regulators".The new systems will give Telstra increased intelligence in its network as each job is assigned a weighting under the system, allowing the carrier to play with its work schedules as new problems arise. It uses a system of "rules and objectives" to make the best decisions on which jobs to tackle first, at the most efficient cost and best use of available resources.The FuturEdge pilot project kicked off last year and four different software releases have been executed since the middle of 2002. In December, the fifth version was released, which includes new workforce management systems for both the metro and rural and remote markets. The Bendigo centre manages the Victorian and Tasmanian markets, while a separate work management centre now operates out of Brisbane. - Duncan CraigBack
Exchange Volume 15 issue 28 - 25 Jul 2003
Article in Industry
Optus to woo mobile content partnersOptus is accelerating plans to open up its mobile network to content providers and businesses and has formed a special project team charged with developing and managing third party content providers and finding ways to help enterprises develop wireless relationships with their customers. In September last year Optus formed a unit called Optus Mobile Partners (OMP) in a bid to boost data revenues from its GPRS network. Soon afterwards Optus announced it would deploy software from an Israeli company, XACCT Technologies, to provision the capturing of customer usage data. That sparked speculation that Optus was preparing to finally launch a new range of content applications for its mobile users.Prior to the formation of the OMP unit, Optus was still reeling from the failure of WAP, and had delayed the launch of its MMS services because its network required a number of enhancements in its back-end infrastructure. The OMP unit is now focused on attracting revenue from companies seeking to use services such as SMS to obtain 'wireless relationship' with their customers.The carrier is maintaining a level of secrecy around the activities of the OMP unit, because it is currently in talks with a number of media companies and other content providers, and it wants to keep those discussions confidential. The size of the OMP unit has also been kept under wraps because Optus is attempting to lock in key corporate relationships and shut out its rivals."OMP's primary business is 'wholesaling' the Optus mobile network and the development and management of third party content providers," an Optus spokesperson said. "Optus doesn't disclose exact team numbers but it's fair to say that it's a team that's growing in line with the business need."Micro SMS billing now supportedSources, however, told Exchange that Optus had finally engineered its mobile network to offer services such as micro-billing of SMS services. That is in stark contrast to its situation last year during the World Cup Soccer Finals in Asia when Optus had planned to offer picture messaging, but could not complete its project on time.The carrier finally launched its MMS service earlier this year, and is now trying to get some traction in the mobile content market. It is understood that the mobile data unit is now enjoying double digit revenue growth. The OMP unit also manages third party content providers that offer a range of unbranded content to the mobile handset on its network to companies such as Legion Interactive, Yahoo, and iTouch.Last year Optus appointed XACCT to provide it with the content engine to enable it to create a link between its mobile network and the back-office support systems such as billing and the customer relationship management system (Exc 14/45, p2). The deal was XACCT's first in Australia and it announced plans to open an office here, principally to support the Optus installation.The XACCT software allows Optus to create "service-specific and usage-based customer billing and pricing models". That allows Optus to better understand how its network is being used, and create new services quickly and cheaply.Mobile awards promote contentThe opportunity for Optus to make profits out of mobile content was this week illustrated by the entries submitted for the Mobile Marketing and Advertising Awards in Sydney. In this, the second running of the event, the number of campaigns doubled to 60, and they were more sophisticated.One of the MMA Award judges, Australian Direct Marketing Association executive director, Rob Edwards, said more companies were seeing SMS as a "powerful and useful addition to the direct marketing and promotional campaign mix and mobile marketing is becoming a big part of a company's marketing arsenal."The awards organisers said that the 60 campaigns included many big name brands using the mobile medium - not just for sales promotion, but also for customer relationship and brand building, general database building, trade channel communications, interactive TV, and community and membership services."It was good to see an impressive array of blue chip brands like McDonalds, Nike, Arnotts and Proctor and Gamble integrating mobile marketing into their campaigns," said the chairman of the judging panel, Douglas Nicol, general manager of advertising agency George Patts. Optus was one of the sponsors of the awards event, held in Sydney last night. - Duncan CraiBack
Exchange Volume 15 issue 30 - 08 Aug 2003
Article in Industry
Telstra moves to hasten Sun One deploymentTelstra has sent a team of executives to Sun Microsystems' US headquarters in a bid to accelerate its adoption of the Sun One platform and realise the significant improvements in speed to market of new services and streamlined application development that were touted when it announced the deal with Sun a year ago.A number of executives from the Telstra Technology group have visited Sun Microsystems in San Jose in the past few weeks, including senior online executive, Crispin Blackall, who works in the Telstra Technology unit. Blackall also visited Microsoft in Redmond to get up to date with the Microsoft's .Net application environment, which can also be supported on the Sun One platform.The initial tie-up between Telstra and Sun, announced in July last year, was triumphantly hailed by the two companies as a major step towards creating a network that "will enable millions of subscribers to access Internet applications from virtually any device".Telstra's aim with Sun One is to create a single, stable platform on which to develop a new base of innovative applications and services, such as unified messaging, mobile gaming, and convenient payment solutions, including enhanced micro-billing options.Telstra Retail head, Ted Pretty, summed up the announcement by saying: "We see the new environment driving material cost savings through consolidation of Telstra's technology platforms, increased speed to market for new services and more efficient application development, integration and maintenance. Revenue growth opportunities exist with more customers being attracted to our networks to access new and compelling applications."Only one web page on Sun to dateHowever, the initial progress has been slow and only the front page of the www.telstra.com website has been converted to the Sun One specifications. The initial announcement said that Telstra would convert its web platform over the next three years, but the first year has witnessed internal resistance from some quarters within Telstra because they are still unsure of the merits of adopting Sun One. The delay also reflects the considerable challenges of migrating Telstra's complex web architecture to the new platform. The Telstra.com website, first built in 1999 ended up involving 40 different software vendors, creating a mass of problems for the development of upgrades and so forth.The task of linking all of Telstra's online customer information is likely to be made more complex as the Telstra CountryWide and BigPond websites will now be run by separate teams within the company. The Telstra Technology team is understood to be looking at the first stages of implementing systems that will allow it to charge for specific content and services in the web environment, using Sun One applications. Sun One is designed as an open standards compliant platform and the idea is that anyone versed in the technology, J2EE, will be able to develop applications which could be supported.That would provide Telstra with new revenue streams from external application partners, as well as revenue from charging for its own services. Telstra would be the primary revenue collector but not the owner or operator of these services. Last year senior Telstra Technology executive Andrew Johnston said the adoption of the Sun One platform would allow it to open its network to an international pool of Java developers. He told Exchange last July "It's like we are building a stereo system: the applications are like the CDs you play on it, and we have a worldwide body of developers working in J2EE."Adoption delayed by restructuringThe adoption of the Sun One platform within Telstra has also been affected by management and structural changes, such as the abolition of the broadband and online services team last year, and continuing upheaval within Telstra's online divisions. Earlier this year online manager, Omar Khalifa, left the company, reportedly after a stand-off with Telstra Broadband's new managing director Justine Milne. He is believed to be one of at least 12 managers who have left the area in the past three years. The latest to leave is Telstra.com general manager, Phil Dobbie, who is now understood to be seeking a new role after his job was passed to Shirley Kruger.Meantime, the Sydney-based BigPond team has made a number of new appointments, including that of Chris Lewis, who was poached from MCI to fill a new role of chief technical officer. That has forced a new working relationship between the BigPond team and the Telstra Technology unit.The BigPond division has also hired its own content and programming manager, Mike McGraw, who was formerly a senior executive with Sydney-based interactive web company, Massive Interactive. - Duncan Craig
Exchange Volume 15 Issue 31 - 15 Aug 2003
Article in Industry
Cisco aims to converge government networksCisco has appointed the former managing director of its New Zealand operations, Tim Hemingway, to spearhead its assault on the federal government sector signalling an increased battle for the emerging IP network and wireless LAN markets.Hemingway officially took on the job of regional sales manager for the ACT at the start of this month after a successful four years as head of the New Zealand operations. He is viewed by Australian management as a specialist in wireless IP solutions which gained some momentum in the New Zealand enterprise market.Hemingway said his biggest success as head of Cisco across the Tasman was the landmark deal with the Ministry of Social Policy in 2000, which saw the government department introduce 8,500 IP phones across the organisation. It allowed the ministry to cut costs by centralising many of its functions.The deal made headlines in the IP world at the time, and Hemingway is keen to nab a similar deal in Australia. He also spearheaded the deal three years ago to supply Telecom New Zealand with its first nationwide IP-VPN network, using MPLS technology. He also helped roll out the first IP network for Telecom New Zealand's ISP Xtra, from its origins as a university network in 1991.He predicts that, over the next six to twelve months, Cisco will secure a contract to introduce a full IP network migration with a federal government agency. He confirmed there were a number of trials and pilots underway already, and that agencies such as the Australian Taxation Office and CentreLink currently have voice communication tenders out in the market."The decision for them is are they going to sign up for a standard voice contract or miss out on the benefits of a full-scale IP network," Hemingway said "My view is that we are right on the edge of a significant swing in moving to some IP deployments."Gov't departments set to go to VoIPHe added that Cisco expects to sign up at least one of the top ten government departments to an IP-network voice and data contract. Already many government agencies carry data over IP networks, but the voice component is often managed by a separate project team. "The challenge is to converge the groups that look after these different parts,"' said Hemingway.Some departments, such as the Department of Workplace and Employment Relations have already made tentative steps. The Department is running a converged network that runs video, while also using wireless telephony, Hemingway said.The adoption of wireless LAN business solutions will be bolstered in the coming year by new security measures that should ease concerns over the risk of losing data to intruders, according to Hemingway. A few months ago Cisco launched its 'structured wireless aware network', which allows users to see who is logging into the network. The next big area will be home wireless solutions, allowing corporates to provide VPNs to executives that want to polish off their work at home, he predicted.Presumably, Hemingway aims to introduce some innovative idea's to the nation's bureaucrats, carved out from his experience in New Zealand, where a small market and a different regulatory regime has created a climate where alternative platforms have emerged. In Australia, most rival carriers simply choose to surf off the Telstra national backbone."The big difference is that New Zealanders tend to use technology to overcome some of the competitive issues," Hemingway said. That has resulted in innovative projects, including a number of wireless trials in regional areas.Still, Cisco expects to milk the Canberra market for revenues its gets from the Defence Department, which is now increasing its spend on sophisticated communications technology in a bid to bolster its efforts against regional security threats."About half of our business comes out of the Defence Department, which is an area in which Cisco has invested considerable funds and resources," Hemingway said. "These include space-type technology to keep an eye on what is happening around the world such as systems that go into satellite networks." Cisco operates a global defence space group and has a number of people from that team based in Canberra. - Duncan Craig
Exchange Volume 15 Issue 32 - 22 Aug 2003
Article in Service News
Connect launches MPLS net and IP telephonyAAPT subsidiary, Connect Internet Solutions, has launched its MPLS network under the name Connect Convergent IP, along with Connect Voice: a hosted IP telephony service using the BroadSoft BroadWorks platform with systems integration services provided by Fujitsu. Connect has started trials of the MPLS service with the Education Institute of Victoria and an un-named national retail chain. Trials of IP telephony with the Educational Institute will start shortly.Connect has spent around $4 million on upgrading to an MPLS network. With Connect Voice, it is aiming to win hosted telephony deals with enterprises seeking to install between 100 to 5000 seats, directly placing it in competition with Telstra, which is planning to implement a channel strategy to pursue the SME market for hosted IP telephony.Telstra and Connect are using the same BroadSoft platform but the smaller ISP believes its extensive experience in developing B2B-style applications for customers will give it some advantage. Connect, which aims to market its IP solutions service to its 8,000 existing business ISP customers, said it would focus on delivering specific applications to companies ready to shift to creating virtual LAN networks."This will all be about quality of service per application," said Connect group product marketing manager, Internet Solutions, Jeff Putt. "Most of our customers have IP-VPNs in place already and they are all looking at a reduction in the [cost]."Putt said the company's education Connect IP customer would be its first triallist for Connect Voice. "We are installing the Connect Voice trial next week with 20 handsets. That will go to 60 in a month and then to 3000 if all goes well." The retail chain is "rolling out IP-VPN to 180 stores, but is not a Connect Voice trial customer yet," Putt said.Smallest businesses potential customersPutt said he expected Telstra to pick up the larger IP voice and data deals, such as the Westpac deal announced last week, but it believes Connect will win smaller deals that its rival may not deem worthwhile pursuing. He added that Connect was happy to get a small percentage of a rapidly growing market and suggested that Connect's target market could easily extend to very small businesses, possibly by using its ISP customers as a market channel."The size of the connection is the key thing. Below 512kbps you are struggling to get decent quality of service. Then it's a question of how many seats they have. We would see we can go as low as five seats."TCO model to assist sales"We are also looking at a channel strategy because we have a lot of ISPs and because of the way BroadWorks is structured. We are able to define sub-level administrators who can specify what services are available to the phones below their level. We are able to partition those areas off and with $100 [SIP] phones its quite easy to see how they could offer the service even down to the residential level, assuming customers have enough bandwidth."Although hosted IP telephony offers many potential productivity-enhancing applications, Putt said he believed sales would be made on a more simplistic return on investment judgement. "We have to be saving people some money and we are equipping our sales people with a total cost of ownership model which allows the customer to model their existing communications costs and compare and contrast. We have been working with Esource, a team of consultants, to develop that model." Putt admitted that this ROI model "does not always stack up in terms of going with a hosted IP telephony solution" adding, "we are working closely with a group of application developers called Carbon Twelve. They are using the BroadSoft platform to develop device-specific clients. The BroadWorks interface software and ways of operating the service are web-based. Carbon Twelve are developing things like Windows XP and Linux clients and writing applications around specific functions such as Microsoft's Instant Messenger."Global launch for Australian applicationChatswood-based Carbon Twelve announced this week the "global launch" of its new VoIP product - miPA (my Phone Assistant) , a VoIP desktop call management, instant messaging and presence product that is being offered by Connect. It interworks with BroadWorks to "provide a user with a greater degree of control over the phone and call related activities". According to Carbon Twelve, standard features of miPA include integration with Outlook providing out-of-the-box CTI functionality suitable for a broad range of users.MPLS project delayedConnect has been preparing for the launch of its hosted IP telephony service since last year, and was frustrated by delays in launching its MPLS network. Parent company, Telecom New Zealand finally signed off on this project earlier this year, and an experienced project team has been put in place.Connect executive, Gurpreet Ghuliani, who oversees the voice and managed network services part of the offering, has considerable experience through a stint at Telstra. Before he joined Connect, Ghuliani was responsible for Telstra's first suite of B2B commerce offerings in Europe, has rolled out other voice and e-commerce products for the carrier, and was a member of the team responsible for Telstra's B2B launch in Australia and Asia.Connect is using Telstra's Layer 2 ADSL network for access as well as XYZed, Uecomm, PowerTel and Amcom in a bid to minimise its own network investment. The Connect IP telephony service is being hosted at its data centre in Melbourne.Connect argues that as the only main network-based IP telephony rival to Telstra, it will be able to provide extremely aggressive pricing for its service. Another company, IP Systems (which is not a carrier), has been offering BroadSoft-based hosted IP telephony services, primarily to smaller companies for over a year, and is reported to be doing well. It purchased its BroadWorks platform direct from BroadSoft. There are also two BroadWorks services coming into operation in New Zealand: from TelstraClear and CallPlus.Putt confirmed that Connect would challenge Telstra on pricing and claimed its rival was launching its IP service as a defensive strategy. "That's because Telstra has the problem of protecting the significant revenues it gets from traditional services such as frame relay and ATM," he said. - Duncan Craig & SCBack
Exchange Volume 15 Issue 33 - 29 Aug 2003
Article in Industry
Telstra seeks to streamline external innovationTelstra has embarked on a trial of a project aimed at opening up its network to bring in innovative new ideas from outside partners, in a venture being spearheaded by the company's productivity guru, Bill Scales.The project was revealed by Scales, group managing director regulatory, corporate and human relations, at a Senate hearing in early August, when he was being questioned about Telstra's reluctance to adopt new technology ideas from a wholesale customer. In response, Scales said a new team had just been formed to change the way that Telstra interacts with external players who want the carrier to be more receptive to new technology ideas."We have just introduced for that very reason a group called Telstra Business Navigator," said Scales. We found that there were a number of businesses which found it difficult to penetrate back into Telstra."Scales said the project would "give businesses an opportunity to find the right person inside Telstra to help them to spread their various ideas". In effect, Telstra is planning to open its doors to import technology ideas and projects from wholesalers, software suppliers, and partners, so it can benefit from their initiatives.The questions to Scales were provoked by issues raised in an earlier public hearing by Agile Communications. The company was crafting a DSL-based business voice and data contract with Telstra and had put "various sorts of technological innovation" into its project.Navigator still in gestationTelstra said it could not comment further on Business Navigator because the project was still in its infancy. "We're still in the process of establishing the team, its processes and the internal networks required," a Telstra source told Exchange. "The project is still at a fairly high level at this stage."However, a copy of an internal Telstra memo has been obtained by Exchange, which illustrates the radical scope of the Business Navigator project. "Telstra receives many new technological, business and product development ideas from potential suppliers, consultants, researchers and entrepreneurs each year," the E-News memo said."It is sometimes difficult for these external groups to identify and initiate contact with the most appropriate Telstra manager. These ideas are often raised and managed locally and can sometimes resurface many times in different parts of the business." The memo concluded by saying that "to provide a central entry point for external people/companies to find their way into and around Telstra, a Telstra Business Navigator team will be established to register, channel and follow through on these proposals."In the Senate hearing Scales foreshadowed a radical overhaul in the way Telstra works with outside parties, suggesting that the organisation would be open to all kinds of players."That will include small businesses which might have an idea that they want to join with us to promote," Scales said. "It night be people who have software that they want to use. It might be even just suppliers."The Senate inquiry's terms of reference are to assess the capacity of the Australian telecommunications network, and to look at Telstra's current investment patterns in order to assess if its services are meeting the needs of customers. The hearing was also attended by Telstra's manager of BigPond network capability, Denis Mullane, who was interrogated in depth by shadow IT minister, Kate Lundy, over the carrier's investment in its nationwide DSL network. That hearing, in Canberra, was the last. The enquiry is due to report by year end. - Duncan CraigBack

Exchange Volume 15 Issue 36 - 19 Sep 2003
Article in Industry
Telstra gears up to sell fixed & mobile services onlineTelstra is planning to sell mobile packages and fixed-line services to its retail and business customers through its website as part of the ongoing overhaul of the Telstra.com model that was announced in October last year. Under the code-named Project Lighthouse, Telstra is moving ahead with plans to make its website resemble a fully-fledged e-commerce entity, completing the change in strategy since it dumped its portal ambitions last year to focus on selling its basic services. Telstra sources said Project Lighthouse was given the go-ahead a few months ago, and is set to swing into operation as the company works on beefing up its retail channel strategy. The project is being spearheaded by veteran Telstra executive Anthony Cross, who was appointed a director of Telstra.com eight weeks ago. The appointment is a new position and Cross will report into the Consumer Sales unit, which is part of the Marketing Group headed by Holly Kramer. However, Kramer is on maternity leave and her role is being filled by Darian Stirzaker. The Consumer Sales unit is a huge part of the Telstra empire, controlling about $6 billion in annual sales. Cohesive structureHowever, the creation of Cross's role, and his line reporting arrangements, indicate that Telstra is moving quickly to align its marketing, consumer sales, and online retail strategies into a single cohesive structure. Cross has formerly worked for Telstra Multimedia and Foxtel and worked in consumer services areas such as payphones, and the 000 service. Sources said his background gives him the experience to try and link all the pieces of the puzzle together. "He has the job of putting together the go-forward model for Telstra.com and he has got a program in place right now to start building it," a Telstra source told Exchange. The project will leverage Telstra's considerable advertising power to get customers to sign up for new retail services online, thus reducing the cost of sales. "The project will bring together a number of the online units and pull the front-of-house functions together," the Telstra executive said. "It will create a retail web interface that will allow customers to undertake self-service and self-sales, which means they will be able to buy mobile phones via the website."The project is being divided into two parts - an 'e-source' component that deals with all of the carrier's fixed-line products and services, and 'ease-net', which covers the mobile portion of the channel program. The planned launch of the e-commerce services coincides with a series of new mobile phone television advertisements from Telstra, which is trying to fend off strong market share gains from Optus and a fresh challenge from Vodafone's new Red SIM campaign. Staff changesThe appointment of Cross should bring some stability to Telstra's online management team, which has seen a number of changes in the past year. Telstra recently appointed Shirley Kruger as general manager of Telstra.com, replacing Phil Dobbie. Her appointment marks a new era of management at Telstra.com after Broadband and Online Services executive, Omar Khalifa, departed earlier this year. Telstra officially confirmed that Project Lighthouse was underway. "This is a constant process of evolution. We are always looking at ways we can improve the delivery of goods and services to our customers," a Telstra spokesman told Exchange. In October last year Telstra flagged that its website would eventually be upgraded to offer e-commerce functionality. "Content will continue to be important, but will be complemented with customer self-help and online applications including the ability to buy goods and services and pay bills online across all customer segment from residential through to SME and at the corporate and government level," said Telstra's Broadband and Online Services executive director, Greg Willis, at the time. He also said: "the new look marks the beginning of a number of changes that Telstra.com will undergo during the next year, including clarifying the role of Telstra's websites."That vision is finally set to come to fruition, as illustrated by the creation of the Telstra Country Wide website, which will also see an upgrade in its presentation and content in the coming months. That project is being run from the Country Wide headquarters in Brisbane. - Duncan Craig

Exchange Volume 15 Issue 37 - 26 Sep 2003
Article in Industry
Telecom NZ to merge AAPT and ConnectTelecom New Zealand has made a radical decision to merge the operations of AAPT and Connect Internet Solutions businesses, its stand-alone business ISP division, a move which has lead to the departure of a number of senior Connect executives.The decision was made a couple of months ago by the interim head of Telecom New Zealand's Australian operations, Marko Bogoievski, against the wishes of the senior Connect management team. It was officially revealed to staff on August 12, and they were told to keep quiet until a media statement was issued. A Telecom New Zealand spokesman has confirmed to Exchange that the merger of the two units is now underway."We have brought AAPT and Connect closer together with the idea of leveraging the scale of AAPT and the innovation of Connect in the IP space, to target medium-sized businesses," said Telecom New Zealand spokesman, Andrew Bristol. "We believe the changes are commonsense and to date the customer feedback has been positive." The merger of Connect, which has its headquarters in the northern Sydney suburb of Lane Cove, marks an end to the entrepreneurial independence of the division, which has 8,000 business ISP customers. The surprise decision has resulted in the resignation of senior marketing, HR and business managers at Connect, including business development director, Laurie Newman. Connect CEO, David Glavonjic, is understood to be on the brink of leaving.Connect directors depart"Most of the Connect directors are leaving or have left the company," a source confirmed to Exchange. "Telecom New Zealand were advised against [the merger] by the Connect management but they went ahead with it because they have put $2 billion into AAPT and they need to get a return on that business soon."Telecom New Zealand said it was still mulling over the brand issues that will stem from a merger of the operations, and no decision has been made yet. Telecom New Zealand also said the two operations could be merged into the same location. The decision marks a new era for AAPT and Connect, which is now under the leadership of new chief executive Jon Stretch who formerly worked for AT&T and IBM. Stretch joined the company in late August, and new chief financial officer Simon Bligh, who worked in Europe with Stretch at AT&T, starts in October. "The idea is to bring more integration to our operations and offer a seamless service from AAPT and Connect so that one person can develop a relationship with the customer through a single point of contact," Bristol said. "We are now after sensible growth. We want to win business where we have the natural advantage of being smaller and more nimble."This week AAPT appointed two new executives to spearhead the new structure. Jennifer Tejada joins AAPT's business retail group as chief marketing officer Business, while Matt McGuire joins the group as general manager sales. Tejada has held global senior marketing and sales positions at i2 Technologies, Inc, and Procter and Gamble in the United States, while McGuire has held senior sales, marketing and business development positions at Computer Sciences Corporation (CSC), Advantra and IBM in Australia as well as Asia Pacific.Stretch is hoping the new team will fire up the company's sales strategy. "To be successful, we need to be the best in the markets we choose to serve, and to live and breathe an attacker culture of opportunism and speed that's always focused on the customer," Stretch said in a statement earlier this week. Telecom New Zealand chief executive, Theresa Gattung, has said privately for some time that the Kiwi carrier would roll Connect into AAPT, in a bid to create a unified sales and marketing structure. The move comes three years after Telecom NZ paid $2 billion for AAPT. Since then it has written down AAPT's value by half, slashed spending by half, and struggled to return decent profits. Advice from McKinsey ignoredHowever, the Connect management team believed they would be left alone in any restructure. Sources told Exchange that Bogoievski went against the recommendations of consulting firm McKinsey, which also advised against the merging of the two different units. In effect, Connect's 300 staff will be absorbed into the operations of the AAPT business. That means front-of-house staff at AAPT will also now deal with queries regarding the Connect data and ISP services, including its just-launched hosted IP telephony service based on the BroadSoft platform and aimed at small-to-medium enterprises. The new structure means sales managers will have to pitch voice services alongside data and IP products. Insiders said Telecom NZ believed they would handle that complexity by undertaking a marketing campaign of new products and services that would smooth any integration issues. AAPT insiders said the move could be disastrous for the Connect business, which has tried to position itself as a value-add services business, offering special e-commerce transaction services to specialist industries. That message is now being undermined by the new "Effie" television advertising campaign which is presenting AAPT as a cheap voice service, sources said. Still, Telecom NZ's Bristol said staff at AAPT have been "re-energised" by the new regime of Stretch. The previous two years under David Bedford were characterised by savage cost-cutting and a general lack of direction. - Duncan Craig

INTERNET WORLD, June, 2001, Issue 1, Vol

NETTING THE JEWELS by Duncan Craig

If you drive three hours out of Bangkok, you get to Chantaburi, a thriving gem trading town that harbours the most successful Internet commerce company in Thailand. Twelve years ago, Don Kogen trekked to the village to discover there was hidden fortune yet to be harnessed all thanks to the power for the Internet.

“I took the bus down to Chantaburi and never came back,” says Kogen, who took his first job on the floor of the local gem center, where he became an expert selector of gems. Kogen had already led a colourful past, leaving school at age 13, and making ends meet with construction work and bartending, before roaming through Asia. He was traveling through Thailand when he read about Chantaburi, then untouched by outsiders. The town is a mecca fro gem trading, and was tightly controlled by a series of middlemen whom each took their clip of the transaction before the gems reached the global market.




Kogen made it his business to get his cut and he started a catalogue business selling gems to international buyers, including many from New York. But it was his move to the Internet in 1998 that propelled his business, Thaigem.com, to corner the world market for online gem trading. In turn, he is now heading one of the most profitable e-commerce start-ups in Asia.

He expects Thaigem to reach US$20 million in sales this fiscal year with a profit of US$5 million. A new strategic investor has injected his first round of outside finance, and Kogen has vaulted above the crumbling dotcom companies around Asia to show how online commerce should really be conducted.


Thaigem's Don Kogen (Centre) with Sheena Rattanaphichetchai (Left) and Amnat Tipparat
While B2B exchanges and large multinationals spend millions on technology to take their procurement online, Thaigem has delivered a killer blow to the notion that you need a ton of venture capital and international expertise to succeed in online commerce.

Indeed he has only spent US$500,000 on his information technology, including leased lined, network operations, computers, and server equipment, which the company built by it self.

The company has succeeded in part because it’s rooted in the local community. 95 percent of the staff are Thai, and most of them are from the local village. Kogen trained all of his 250 staff himself. Most of his local Thai staff write, read and understand English but the don’t speck in English. “We took all these young guys in the local community and said we are going to make this city famous,” says Kogen, who added Thaigem is now the largest listed supplier of gemstones on Amazon and eBay.

It started two and half years ago when he experimented by trading a few stones on eBay. Soon he figured out there was a real way of making money.

“I went from one percent e-commerce to 100 percent e-commerce in seven months, “Kogen says. Amnat Tipparat, the chief technology officer, developed the systems in-house, including the shopping cart system, which he created in a week.



Kogen’s wife Nuntiya looks after the accounting, and he also hired U.S.-educated Sheena Ratanaphichetchai as his financial advisor.The gem trading business was formerly closed to the public, wrapped up in the intricate clubby world of middlemen, who performed a small service in order to reap their margins. Kogen has smashed that model by purchasing gemstones in bulk, and in multiple lots of different quality, then re-distributing the product to the market.

A customer may reside in New York and want to buy a single ruby, or US$80,000 worth of rubies. No problem, Thaigem will make the trade, at prices 500 percent below that of traditional dealers.

“Gems were being sold before at an inflated value, of up to 45 times their price,” Kogen says. “We are saying this is the price and you can’t compete with us. We are killing everyone who is adding on, and they will be wiped out.”

He advises the Thai government on their e-commerce initiatives. And is involve in an international paperless trading forum. Kogen’s mantra is “maximize efficiency,” and he repeats the phrase all day, as he runs barefoot around the office, checking orders, and speaking in Thai to the army of young workers that he has trained from the local community.



Kogen, though, made some key decisions early on to ensure his service could beat other web-based gem traders and the local wholesalers. Consumers pay a flat fee of US$15 for shipping costs, of importing exporting, customs and credit card charges. Then he uses Federal Express to get the product to the consumer across the world within three working days.

Kogen owns seven buildings in the town, runs his own Internet service provider, and provides gem dealers with an online jewellery directory so they can promote their own collections. He also owns his own local TV station so people can put up their requests and gem traders in the town can respond immediately.

Once the dealer views a request, they send a runner to the buyer and the transaction is completed His portfolio includes a computer website that has 23 PC outlets.

Inside the labyrinth of his main building, a team of workers are photographing the latest bacth of stones acquired by Kogen. Thaigem.com has 1.8 million stored images/picture of gemstones on its system.

Every time a product moves from one department to another, the computer tracks its movement. Soon, they will implement bar=coding to make the system more efficient.

Kogen also decided to accept all forms of payment. The buyer also has 48 hours to decide if the product is acceptable, during which the money in held in escrow.

He also has a room full of Asian collectibles which are sold online through another website, asianmarts.com.

It’s in the technology development that Kogen has excelled. He is now deploying the ninth version of his shopping cart, which pulls in three quarters of the company’s revenue.

“Customer support, procurement, and technology is key, which is why outsourcing is not an option,” Kogen says. That attention to detail has paid off-the shopping cart was getting a mere 20,000 hits a month last year.

Now its up to 1.2 million to 1.6 million hits per month. In a short space of time, Kogen’s business has and he’s confident it will onto a winner.

Kogen knows there are buyers of his product that are achieving huge margins by on-selling his gemstones in other parts of the world. That doesn’t bother him – he has 10,000 customers that are providing him with increased volume every month.

“Ten new people come into my office every day to sell me product,” Kogen says. “I mastered the knowledge of how to buy at the right price.”

Foxtel boss outlines plans for new iTV services later this year
Issue 2004, 17 February, 2003

Foxtel chief executive Kim Williams has revealed for the first time that the pay-TV provider plans to launch personal video recorder (PVR) services in 2004, about a year after it makes its initial foray into offering digital interactive services in October.

In a keynote speech to the Internet Industry Association (IIA) in Sydney last Thursday, Williams revealed that Foxtel would boost its offering to consumers to 120 digital channels after it upgrades its network to offer interactive services.

"In the first phase, around 120 channels will be rolled out and an electronic program guide will allow people to plan their programs as we will offer 30 near-video-on-demand channels,’’ Williams said. "Consumers will be able to select specialist news bulletins and get access to sport statistics and player profiles.’’ The company also plans to offer e-commerce services such as paying your Foxtel bill via the TV set.

Williams confirmed that "PVR will be launched about a year after we launch interactive services’’, setting up a heightened period of competition in 2004 between the pay-TV and free-to-air TV networks. It also means that Telstra will move closer to its dream of having a dominant share of the market for digital content delivery.

"You will have access to rewind and replay services and you will never miss your favourite TV show because you are in control of your TV set and it all comes with a 40GB hard-drive for storage,’’ Williams said. That sets Telstra up to be in a powerful position to bring its packaging of broadband, mobile and entertainment services into a single offering.

"PVRs will effectively kill the free-to-air TV networks because what happens when people can record programs without getting advertising?,’’ asked an interactive TV executive who declined to be named. Vendors such as News Digital Systems (NDS), a middleware provider backed by News Corporation, is betting its business model on a mass uptake of PVR.

NDS has a technology called the XTV PVR package which can record programs from start to finish whenever they’re broadcast. The cost of the Foxtel upgrade was estimated by Williams to be $650 million. The bulk of that expenditure will be for the subsidy it takes on the cost of the set-top box, estimated at $500 per subscriber. Williams revealed that Foxtel now has 1.05 million subscribers, adding up to an investment in the boxes of roughly $500 million.

While Williams opened his speech to the IIA by discussing the common interests of ADSL services and digital TV, many attendees said they were disappointed that he didn’t delve into the convergence issue at a deeper level. Some executives said that Williams seemed to be defending the powerful interests of Foxtel’s shareholders – Telstra, Kerry Packer’s PBL and News Corporation.

Indeed, Williams said that he hoped that the Seven Network, Ten Network, ABC TV and SBS would all sign digital re-transmission deals soon in order for the future of interactive TV to be healthy in Australia. Packer’s Nine Network has signed a commercial digital retransmission deal already and Williams said the other networks should be prepared to pay for the cost of carriage.

"Foxtel must pay for its bandwidth and it expects the other networks to pay for their share of the costs,’’ Williams said. "We have already agreed to down-stream content agreements with TransACT and Neighborhood Cable and our open access offering extends to DSL operators."

However, he alarmed some executives when he said that UK pay-TV leader BSkyB now receives 24 million pounds a year from other interactive TV providers for use of its network. In addition, he said that 16% of all new sales made by BSkyB are being booked via the Internet. Those comments were of some consternation because they indicate that Foxtel will use the power of its platform to control content delivery and packaging more effectively than its rivals. Foxtel has already been given a head start over its competitors under the terms of the deal with the Australian Competition and Consumer Commission.

It is now believed that Foxtel paid somewhere between $50 million to $70 million for the Optus National Digital Media Centre in Sydney’s North Ryde. That’s based on the $500 million estimate for the Foxtel set-top box deployment and around $50 million in required expenditure for the upgrade of Telstra’s network.

Optus would have had to spend around $200 million on set-top boxes if it had proceeded on its own, costing each subscriber close to $1000 per box. Foxtel has essentially absorbed those costs as part of the joint venture, along with $600 million in future program liabilities.

Kindly reproduced with permisson from Communications Day. Written by Duncan Craig.

Canberra to boost funds for digital content
Duncan Craig
FEBRUARY 10, 2004

AUSTRALIA'S digital content industry could receive a funding boost of $60 million later this year after the Federal Government unveiled the final part of a three-year study into promoting the industry.

Communications Minister Daryl Williams said on Friday that the Government would in the next few months put into place a digital content industry action plan.
Speaking at the Australian Interactive Media Industry Association's annual awards night, he said the plan would cap a process that had begun in 2001 with the Creative Industries Cluster Study.

That project had resulted in a stream of reports from consultants on the state of the market.

Now the Government was close to finalising the details of a new strategy designed to help digital content makers compete internationally.

"It will end with a report that goes to Cabinet, which should take a matter of months," Mr Williams said.

The report would investigate ways to remove obstacles to growth, examine the quality of facilities available to the industry, and assess opportunities for export, he said.

Mr Williams would not comment on the Government's likely funding strategy.

Industry players said the Government was considering funding the digital content industry with grants and initiatives to the tune of $50-$60 million annually.

AIMIA is the peak body for producers of all forms of digital content, and its awards - now in their 10th year - this year attracted a record number of entries from big commercial producers such as Hutchison Telecoms, Seven Network, and Telstra BigPond.

ABC New Media scooped the pool, winning six of the 16 awards, the top gong going to the ABC's Winged Sandals website, which teaches children Greek mythology.

The award for the best game went to Ratbag, which has already sold 250,000 copies of its sprint-car PS2 game in the US alone.

A Qantas extranet marketing website was another winner.

Digital content players said they were not looking for unrealistic handouts but they expected the Government to play its part.

"Our strategy is about innovation, quality and ensuring we have an audience for our product," ABC New Media and Digital Services content head Ian Vaile said.

"The Government should be promoting high-quality content and looking at ways to build communities, but it is difficult because you can't necessarily pick winners in content."

In December, Mr Williams signed up to a UN accord requiring governments to form an action plan to help the public and private sectors develop new information and communication platforms.

Local producers are hoping he can deliver a carefully considered strategy, especially as new commercial avenues open up.

"The most interesting thing happening now is that finally there is a market out there for digital content," Warners Music Asia-Pacific vice-president Jon Simon said.

"We are going to see great things happen, including more content that is delivered more quickly, and more opportunities for Australian content producers."

The interactive media industry has been frustrated for a long time by the absence of a unified communications strategy, but Mr Williams is now under pressure to come up with a strong industry plan to assist the private sector with grants and other forms of investment.

"The Government needs to take a leadership role in fostering quality and innovation, and the digital content market needs financial investment to grow, just as they invest in the film and sports markets," AIMIA national president Sandra Davey said.

Article: Heavy Bandwidth Trials, 11 April 2003



CENTIE seeks applicants for network trial of heavy-bandwidth applications
11 April 2003

The Centre for Networking Technologies for the Information Economy (CENTIE) is moving into its next phase and seeking applications from companies interested in trialing new heavy-bandwidth applications over its 10Gbps network.

The CENTIE project, funded by the federal government, was officially launched in Sydney yesterday, 18 months after its initial conception. The project was one of three chosen to receive government funding, along with the GrangeNet optical fibre project linking supercomputers and the m.net consortium, which is developing wireless network applications.

CENTIE has built high-speed networks in Sydney, spanning Marsfield in the north to the UNSW in Kensington, and in Perth. It also has a long-haul backbone from Melbourne to Perth, provided by IP1. The initial focus of CENTIE’s application development has been in healthcare, universities, information brokering, film post-production, but the pioneers behind CENTIE now want to expand the trial areas to new applications.

The information brokering area may be the next big growth area and the Australian Taxation Office, the Commonwealth Bank and the Australia Stock Exchange are exploring the prospects for new applications. In particular, the banks are interested in a model whereby multi-party transactions are done in parallel, instead of the current single batch and dispatch system. Down the line, CENTIE said it could create a system that allows people to fill out tax returns online.

However, the key concept behind the CENTIE network is that the cost of bandwidth in Australia is still very high and that acts as a major obstacle to enterprises and public agencies creating a demand for new advanced network solutions. CENTIE is trying to act as an accelerator of demand as well as new applications.

"Over the next 18 months we aim to deepen the base of the network,’’ said CENTIE technology director Dr Dean Economou, who is part of the CSIRO’s telecommunications division. "We are not trying to be a commercial carrier or anything like that. We are essentially trying to show people that certain projects are worth doing.’’

CENTIE director Dr Terry Percival said he hoped the advanced network project would convince companies of the usefulness of 10Gbps solutions and result in them approaching the telecommunications carriers and suppliers to offer higher-speed applications.

At the launch of CENTIE in Sydney yesterday, two applications were demonstrated. The first was a remote film editing application that allows large files to be transmitted over the network, while the second showed a Sydney-based saxophonist using the high-speed system to interact with students based in Perth. Economou said that he is now aiming at getting the CENTIE network to link up all of the supercomputers within Australia and with overseas supercomputers, so they can assist each other in making complex calculations.

A 10Gbps network may be hard to envisage in terms of overall capacity, but the CSIRO has created an example that makes it easier to grasp. "If you took all the people of Sydney and got them to make a telephone call at the same time that would be 10Gbs,’’ Economou said. "The idea of CENTIE is that if you don’t have the high-speed networks that other countries are developing then you won’t be able to explore the business cases of the future.’’

Economou also said that the CENTIE project would probably operate in a similar fashion to Canada’s Canary Network, whereby companies and agencies seek access to the network for projects that are cutting-edge. CENTIE would then assess the cost of connecting the trial customer, but the network can handle hundreds of applications because the typical bandwidth capacity of the current projects is 30Mbps to 100Mbs. Project trials would usually last around six months, Percival said. The CENTIE network includes a discrete "Crash and Learn’’ network in Sydney that allows the research group to trial new applications without fear of crashing the network.

The CENTIE project is the brainchild of Economou, Percival and Gary Doherty, the business development manager for the project. Percival was one of the co-inventors of the 802.11a standard via his association with Radiata, while Economou created the ATM SAR (segmentation and re-assembly) protocol.