Fifteen years is a long time—especially when the salary rates of Telstra’s overseas management imports are considered.

It was in 1992 that veteran telecommunications executive Charlie Zoi left the US to join Telstra as marketing director under CEO Frank Blount staying for five years and taking on the roles of COO Consumer and Commercial and GMD for Business, International, Wholesale and Regulatory. His starting salary was just A$160,000 despite arriving from a senior management role at Bell Atlantic.

As one of the first wave of American executives to take the helm at Telstra after its corporatisation, Zoi says he laments the element of largess that seems to have hit the carrier under the current management, its relationship with the government and what he views as falling quality of service for consumers.

Reflecting on the groundwork he and his team put in to the lead up to de-regulation he said, “when you look at what came out of the funnel, after the five years and Frank’s six, we didn’t do half bad in the transition. We increased the value of the company, competition was increased and there were a lot more entrants in the market. I don’t think it was a bad result, it wasn’t a bad transitional time.”

De-regulation regrets: Zoi’s only criticism of the introduction of the pro-competitive regime was that he felt “that my hands were tied” in the wholesale business.

Citing a multi-million dollar billing dispute with AAPT as the primary source of his concerns at the time, Zoi said “if those who bought wholesale from us did not pay their bills for some reason we could not really turn them off because the regulator would have jumped on us.”

Zoi claims that at the time “AAPT made its business plan numbers by not paying its bills. What they relied upon was the fact that our IT system was never built to handle the wholesale business.”

Telstra’s current report card:  Zoi says he feels “disappointed” at Telstra’s current market play, “I don’t think the consumers have benefited much. Maybe I am living in a fools paradise but I thought the consumers benefited greatly during 92-97. In the period that followed there was an astonishing rise in prices but not a great proliferation of service and no-one has been contacting me lately with any great deals or bargains.”

He adds “my feeling is that the competition is shallow (and) not really had hitting and driving. The difference may well be from the inside out it looks different from the outside in. But I know that we were driving product unit costs down so that we could have competitive prices. All I can see now is that prices are going and up with no real bargain.”

 “My opinion is they’ve lost it. I don’t think their public persona is very good. Say what you will about Frank Blount but he was a wonderful CEO . He had charm and her really cared and that permeated through the whole organisation. He wasn’t a shouter or a screamer.”

Telstra accountability: Zoi also ponders how Telstra pricing could be reduced if Telstra curbed its excessive executive packages. “Four family trips per year, pretty good accommodation and in a year they may all be gone. Who’s job is to oversee that. How much are they spending on consultants? What would the price of services be if all of those costs were contained?”

Zoi questions how Telstra executive salaries had reached as high as the $7 million level and called for accountability. “I’m probably not as good as Sol but I bet I’m 10% as good as him. I’ll do the job for $700,000. The point is you don’t have to pay these atrocious salaries. The largess is out of control.”

Telstra vs the Government: Zoi said that he has found it difficult to comprehend the strategy employed by current Telstra management in dealing with the government and the regulator.

“Their behaviour is similar to those who have nothing to lose. It is such a different mode of thinking and mode of operating than we did in the 1992-1998 period . If we had a bone to pick with the regulator or with the owner we did so privately. We discussed things and eventually came out with a deal. We also recognise that we were under close scrutiny to allow for competition that what the whole regime was all about.”

Unlike Telstra’s current confrontational stance against the government, Zoi said he and Blount were initially reticent to engage with Canberra. “We were advised because of our American accents to stay away. I do remember we stayed out of Canberra until we were asked why we weren’t seen there.” But Zoi says once a relationship was established “we were well received and understood.”

 “Why would you use the approach of the current mob which is insulting the regulator, insulting your government and insulting your (carrier) correspondents – I assume that they are still doing business with SingTel and Optus as correspondents. Why would you get mad at all these people, insult them publicly rather than get a negotiated commercially accepted deal? I don’t understand their strategy,” he says. “Never call the regulator a lap dog.”

Zoi contrasts what he says is the basic customer centric focus of Blount vs the politically centric Trujillo. “We didn’t want to fight our battles in the press we didn’t want to fight the battles in the courts. We want to fight it out in the competitive battlefield with the customer. Let the customers choose,” he said.

Zoi contends that Telstra is stuck in a monopoly mindset. “They are relying on some structure that is no longer applicable. It is a competitive world and the only thing that wins in a competitive market place is that you’ve go to be more price competitive and provide better service than the next guy. Anything less is just a temporary stalemate. And I don’t run into an awful lot of people that think their service is very good.”

Split Telstra:  Zoi says he advocates the structural separation of the carrier, and claims that this is the way to move forward. “John Howard does not have to decide for Telstra, what he needs to do is have a philosophy of business and let that flourish. I think the first thing to do is split Telstra in half and have a dispassionate builder of networks with a lot of resources maybe spawning of some other ones and then you have a retail business that can really compete on an equal basis.”

Zoi is also quick to dismiss the necessity of FTTN as a technology citing a range of wireless access technologies and powerline as credible alternatives. “You don’t have to have fibre. There are lots of alternatives. Utilitel is a great idea. Broadband over powerline should be given chance. It doesn’t all have to be FTTN.”