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Vodafone boss confirms float, holds 5G, zaps copper

The Vodafone New Zealand stock market float is on, 5G is probably two years away, copper is on the way out, and the company plans a push to get costs out of the business - in part by improving the customer experience and getting more people dealing with the company digitally.

That’s the news from Vodafone New Zealand's newly installed chief executive Jason Paris. Five days into the job - though he’s been in the building for six weeks - Paris told BusinessDesk he is also ruling out taking Vodafone NZ down the content acquisition path being followed by his main competitor, Spark. Instead he sees the company’s role to be a content curator and aggregator through Vodafone TV.

“Our job is not to dictate, just make it easy for customers to access content.”

Paris, the boy from Invercargill whose mum still works as a meat inspector in the local freezing works (ahh, those Southland cheese rolls...), says one of his briefs when he was told he had the job - “not asked, told” - early this year was to bring the much-anticipated stock exchange listing to fruition.

The target for the initial public offering is 2020, but there’s a bit of work to do beforehand, Paris says.

“When investors look at us they don’t see us as growth stock, they see us a yield stock. So we need clear line of sight to modest growth year-on-year before the IPO,” he says. “That’s more likely to come from us running a more efficient business and reducing costs than an expectation we are going to get significant revenue growth, given we are competing on price."

On timeframe, he says: “I’ve been given 12 months", and for growth targets he says: "I’d love to see low single-digit growth.”

In a hugely competitive market, Paris says one way to tackle costs is to speed up what he calls “digital Vodafone” - getting much more of the interaction between customers and the company online.

“We want to make sure customers don’t have to call us any more; that they can manage everything via their mobile device, via their app.”

Customer service is clearly on Paris’ mind, both as a way to cut costs and to recruit and retain customers. As the new boss, he’s out to find out where the sticking points are.

“When someone has to call us, it’s not great for us or for them. We get hundreds of thousands of calls. Most go pretty well, but thousands of them don’t.”

Another area Paris will be focusing on is getting rid of low-performing products and services. The company has more than 3000 different products and needs “a lot fewer”, he says.

“We’ll look at the cost of providing those products and how much customers might be prepared to pay in the future.”

Near the top of the hit list will be copper broadband, which is costly to maintain, prone to breaking down when it rains, and isn’t fast enough to handle some of the innovative products on the horizon.

“I want to migrate all of our existing copper customers onto fibre by the end of 2019,” Paris says. Which means look out for some good deals on fibre. Customers insisting on keeping their copper plan will be gently sent to another provider, he says.

Paris worked for Vodafone arch-rival Spark for six years from 2011 to 2017 as head of home, mobile and business. Before that he had roles with TVNZ (2006-2010) and TV3/FOUR (2010-2011).

At the end of 2017, he left Spark for the job in Europe, packing up his wife, a top Auckland lawyer, and three pre-teenage children, for a few years of adventure. But before they’d even left the country, Paris says the company shoulder-tapped him for the Vodafone NZ top job.

The family’s already-arranged leaving party was actually a “we’ll see you again in six months” bash, though hardly anyone was allowed to know that.

Paris takes over at Vodafone from long-standing CEO Russell Stanners, who led the company through a period of big change, including the takeover of Ihug in 2006, of TelstraClear in 2012, and more recently of rural broadband provider Farmside.

Stanners saw the company go from a purely mobile business to an integrated telecommunications company and got Vodafone included as a partner in the government’s multi-million dollar Rural Broadband Initiative.

The former chief executive was a big fan of partnerships with other organisations and established some major deals with places like NZ Police and Waitemata District Health Board.

Paris says that focus isn’t going to change.

“You don’t have to build it yourself; the best opportunity is to partner.”

Paris says one of the biggest challenges Vodafone faces, like every other telco and media company, is how to get customers to value and pay for what they’ve come to expect will be super-cheap.

“I love competition based on innovation. I hate competition based on price and discounting. I know we are contributing to it, driving the price down. When I worked at Spark we used to talk about ‘bloody Vodafone and 2degrees’. Now I’m at Vodafone we talk about ‘bloody Spark and 2degrees’.

“It would be nice to be spending more time on innovation and partnering, on lifting the bar in New Zealand, instead of just giving customers more for less.”

Paris picks up his smartphone.

“Someone’s happy to pay $2700 for this device and complains about spending $19 to connect to it,” he muses. Yet that phone is pretty much valueless without the connection.

“Our job is to reset a bit and have the conversation with customers why they should value the services we provide.”

Which brings him to 5G - super-fast, fifth-generation mobile internet. Paris says while he’d love to be talking about 5G coming soon - the company did some world-first stuff involving 5G gaming recently - he’s waiting until customers are ready to pay for the technology before making any major investments. That’s probably a couple of years away, he says.

“It would be madness to add cost and complexity to your business for a technology that customers don’t value. Our job is to make sure customers do value it.”

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