BusinessDesk report by Paul McBeth
Telecom Corp, the country’s biggest telecommunications company, has set up a new incubator-style unit to come up with new services and products that can leverage the shift to an ultra-fast broadband world.
The Auckland-based company has launched a digital ventures team to seek out high potential growth opportunities to deliver new revenue streams and generate bigger returns, it said in a statement. The unit will set up partnerships in new markets to build new businesses and products, which may be rolled into the larger Telecom group or hived off into businesses in their own right.
Initiatives already underway include financial services such as Telecom’s existing smartphone near field communications and mobile wallets, big data and advertising, over-the-top services like entertainment and home management, and e-verticals such as e-learning and e-health applications.
“Telecom is making a strategic shift to a future oriented, competitive provider of communications, entertainment and IT services over our networks and the cloud,” chief executive Simon Moutter said. “It won’t be enough for us to become just cost competitive, we also need to identify future revenue generating opportunities that are arising in a rapidly changing world.”
The phone company is in the process of laying off up to 1,200 staff in a bid to strip out as much as $110 million in its annual wage bill, as it moves its focus to offering services and away from building networks to become a data-driven and mobile-focused telecommunications operator.
Last month, Telecom said it was looking at entertainment services as part of its future make-up at a time when broadcasting and telecommunications face growing convergence. Streaming and on-demand video are seen as the appeal for consumers to buy ultra-fast broadband services, and Telecom launched its retail fibre offering last week.
The new digital ventures unit will be headed by Rod Snodgrass, who has been chief product officer for the past two years.
“Data and mobility mega trends are only going to continue as a digital life becomes a reality,” Snodgrass said. “While these trends carry challenges, they also point towards potential and emerging business growth opportunities.”
Shares in Telecom fell 1.2 percent to $2.38 in trading today, and have gained 5.9 percent this year.