Telstra's new take on SME market

Stuart Corner
Wednesday, 21 September 2005 17:20

Opinion and Analysis

Telstra has been reported to be making a major shift in the way it tackles the SME market, making more use of systems and network integrators. Déjà vu!

Telstra Business managing director, Christine Holgate was quoted saying in an email to staff: "The Telstra resellers will manage all aspects of the customer relationship, including billing, and pay Telstra directly for the products and the carriage required to support the needs of their customers,"

However, whatever these systems integrators are integrating, it won't be Telstra services. The arrangement, reportedly, will apply only to data services and not to voice or wireless services. It seems that what this really amounts to is that Telstra hopes these integrators will use its DSL services as part of a package along with routers management and network design and implementation. "I will never pass the ownership of the customer to a third party," Holgate was reported to have said in an email.

So how does this fit in with all the talk of providing complete solutions and the notion that everything is converging: fixed and mobile services and voice and data? I have no idea, but this news serves once again to remind me of Telstra's repeated attempts to overcome the problems faced by a very large organisation trying to serve very small customers with complex needs. None appear to have worked because all are now distant memories.

Remember the Billy Connolly "People with Initiative" campaign launched in March 1998? It was ushered in by Ziggy Switkowski (then head of Business and International) with the grand claim that "never before has Telstra attempted a business campaign on such a massive scale and involving so many components...Internally I have laid down the challenge to staff to find new ways to anticipate our customer needs."

For the campaign Telstra developed 100 case studies showing Telstra staff providing "all-embracing telecommunications solutions for complex business problems...to demonstrate Telstra's ability to meet the needs of the business."

And just a 18 months later Telstra was trying a different approach with "Just Get Me Telstra". This was described by the executive in charge as "not a short-term campaign". Lindsay Yelland, who was then head of Telstra's business retail division summed it up by saying "We don't just want to sell a doctor a Faxstream service, we want to automate his practice."

Then in 2002 Telstra announced a new managed solutions/services initiative. When I asked Telstra how it was going to reach these small businesses, the answer was through ISPs, telephone resellers etc rather than direct. But just as now, Telstra intended to retain ownership of the customer. I wrote then, and I think it's as true today, that: "The IT&T options available to small business are wider and more complex than ever before, and the potential benefits correspondingly greater. But developing delivering and supporting these is best left to entrepreneurial smaller organisations. By setting up the right structure, providing the basic building blocks and fostering its partner relationships, I believe Telstra has a far better chance of growing the market and increasing shareholder value than by trying to own the customer and maximise its share of the customer spend."

What was it COO Greg Winn said yesterday? "We are not going to reinvent the wheel, as we replace some of the broken pieces of our business with new approaches that we know work."