Vodafone IPO

[trader_jackson]

As you may have seen in NBR "Vodafone to float on the NZX", an announcement is expected within 2 weeks (IPO to be run by Deutsche Bank).

Revenue of $2.02b, EBITDA of 481m, enterprise value of $3.4b.

Thoughts?

[hardt]

As you may have seen in NBR "Vodafone to float on the NZX", an announcement is expected within 2 weeks (IPO to be run by Deutsche Bank).

Revenue of $2.02b, EBITDA of 481m, enterprise value of $3.4b.

Thoughts?

See anything about the proposed listing value?

[Rep]

Every IPO is about a fair price for future value. 'Enterprise value' is just over 7 multiples of EBITDA but have to understand gearing, future capital and.... realistic forecasts of future earnings.

[JBmurc]

Be interested in Yield ..... been Vodafone user for decades

[SilverBack]

As you may have seen in NBR "Vodafone to float on the NZX", an announcement is expected within 2 weeks (IPO to be run by Deutsche Bank).

Revenue of $2.02b, EBITDA of 481m, enterprise value of $3.4b.

Thoughts?

As usual, the devil is in the detail. Thanks for the heads up but until the prospectus is issued it is hard to say how good a deal the listing will be. Keep us informed all the same. Cheers.

[Investor]

Will be avoiding this

[axe]

"royalty" payments to parent company will be the big question on this one.

The bulk of Vodafone's profit boost was thanks to a $35m drop in finance costs that followed a move by its British parent to inject more equity into the company and to reduce the interest rate the subsidiary has to pay on internal company loans.
- Stuff

[Kropotkin]

"royalty" payments to parent company will be the big question on this one.

Agree. How much of a transfer the parent demands will be the key factor in the local operation's profitability.

Another key issue for mobile in the NZ market (and globally) is static to declining ARPU and the relatively high cost of customer acquisition.
NZ already has a highly saturated mobile market so the real growth opportunity is IoT - this is what will be driving investment in 5G and beyond.

The obvious advantage to VF is scale. They are the biggest global brand, have incredibly deep pockets and are capable of demanding enormous concessions from network equipment providers in terms of price and equipment exclusivity arrangements. As such, their technology costs and deployment timelines can be controlled a lot more tightly than their competitors, and their time to market tends to be faster.

The other elephant in the room is regulation. Mobile providers have got of relatively lightly in NZ for a long time but that could change with little warning.
Saying that, the market is pretty competitive so intervention by ComCom doesn't seem likely in the medium term.

[winner69]

)ne way to solve a problem ...tell the customers to piss off

https://www.stuff.co.nz/business/industries/96631562/vodafone-to-ditch-email-after-failing-to-beat-technical-problems

[peat]

)ne way to solve a problem ...tell the customers to piss off

https://www.stuff.co.nz/business/industries/96631562/vodafone-to-ditch-email-after-failing-to-beat-technical-problems

Certainly not a great sign if they cant provide an email address.
I've used one of their sub domain names within my email for a very long time, after they bought out my first ISP. This is their only service I use, and its cost me $5 a month (somewhat unnecessarily) But I've been very reluctant to change my email address simply for reasons of continuity, now I will be forced to.

[Beagle]

Often referred too as Vodafail...I'll put the popcorn on for this one and watch from the sidelines.

[JBmurc]

Vodafone Group yield-2017 5.7%

[steveb]

Often referred too as Vodafail...I'll put the popcorn on for this one and watch from the sidelines.
Hound I agree 100%.
Total waste of space.If you have a problem tough luck, as the the easiest thing for them to do is nothing.

[minimoke]

Certainly not a great sign if they cant provide an email address.
I've used one of their sub domain names.
I would have thouhht this to be relatively straight forward for a technology driven communications company. That they can't get this right suggest there is potential for mammy other things to go wrong and be left unresolved.

I won't be in to an ipo.

[kiora]

Mobile internet data becoming more and more competitively priced.Increasing data caps and even unlimited data.Which provider can build the biggest pipes quicker?
Vodafone at the moment has best mobile data performance

[trader_jackson]

Often referred too as Vodafail...I'll put the popcorn on for this one and watch from the sidelines.

Like you did with Oceania? ;)

[Jantar]

)ne way to solve a problem ...tell the customers to piss off

https://www.stuff.co.nz/business/industries/96631562/vodafone-to-ditch-email-after-failing-to-beat-technical-problems
I am one of them. Landline, both mobile's (mine and Wife's), internet all with Vodo, but as I have to change email provider I shall change the lot at the same time. Looking at comments on social media, I am only one of thousands.

Not a good business decision at the time they may be looking to float.

[Snoopy]

I am one of them. Landline, both mobile's (mine and Wife's), internet all with Vodo, but as I have to change email provider I shall change the lot at the same time. Looking at comments on social media, I am only one of thousands.

Not a good business decision at the time they may be looking to float.

Don't bother changing to 2 degrees broadband. They have stopped new customers opening e-mail accounts. I am guessing the end of their mail server is nigh as well.

SNOOPY

[kiora]

Using gmail good for filtering spam but they appear to use private info to target adds .
New 2 deg Mobile broadband with inc data OK.Do have to tick roaming in some areas to go on Vodafone network though?

[fungus pudding]

Don't bother changing to 2 degrees broadband. They have stopped new customers opening e-mail accounts. I am guessing the end of their mail server is nigh as well.

SNOOPY

Are they any good apart from that? They seem to be up with any others for mbl phone connection

[Snoopy]

Are they any good apart from that? They seem to be up with any others for mbl phone connection


2 degrees are good for mobile phone. But when I paid a visit to their Christchuch HQ, they seemed to be pushing small business broadband packages. That and high use fibre broadband. If you were an 'average Joe', after a basic broad band connection with e-mail support they didn't seem interested. Claimed they weren't big enough to match the discounted offerings from other players either. My conversation with them was civil and they were very polite. But I 'got the message'.

SNOOPY

[macduffy]

I am one of them. Landline, both mobile's (mine and Wife's), internet all with Vodo, but as I have to change email provider I shall change the lot at the same time. Looking at comments on social media, I am only one of thousands.

Not a good business decision at the time they may be looking to float.
I'm another Jantar. Probably time to shift everything again. Spark's turn?

[Zaphod]

I'm another Jantar. Probably time to shift everything again. Spark's turn?

With commoditized services, it's a race to the bottom. The constant churning of the customer base that's now occurs in order to obtain new customer discounts isn't a viable long-term proposition. I think power retailers are in a similar position.

Having said that, from a personal perspective I'd advise changing provider every so often to take advantage of these deals.

[Zaphod]

Using gmail good for filtering spam but they appear to use private info to target adds .

Yes, the big winner in all of this will be Google who will develop more profitable relationships directly with tens of thousands of VF/Clear/Paradise/etc. email refugees.


New 2 deg Mobile broadband with inc data OK.Do have to tick roaming in some areas to go on Vodafone network though?

2 Degree's coverage is their Achilles heal AFAIC. VFNZ aren't too far ahead of them.

I'll definitely avoid any VF float for the foreseeable future.

[trader_jackson]

Extracts from recent Street Talk article on AFR (1pm today):
Bank of America Merrill Lynch has scored the third mandate on a proposed $1 billion-plus listing of Vodafone New Zealand.
As first reported by Street Talk on Sunday, BoAML joins Deutsche Bank and its affiliate Craigs Investment Partners and UBS on the ticket.
NZ-owned investment and advisory firm Forsyth Barr is BoAML's partner across the ditch, with bankers there heavily involved in the listing preparations.
A non-deal roadshow is being planned for Aussie and Kiwi investors in coming weeks spearheaded by Deutsche Craigs.
Transaction may slip into 2018, if it does proceed.

[trader_jackson]

Another pay to view artcile in NBR with no (real) new info except that the listing is likely going to be pushed back to 2018 due to the election.
So does that make OCA the only (likely) listing on the NZX this year?

Although the article did mention that Vodafone (parent) have spun out Kenyan subsidiary Safaricom in 2008 and South African business Vodacom in 2009 - I note both have done nicely on their respective exchanges since being listed, although different countries will naturally result in different factors (eg NZ could be more saturated and competitive)

[axe]

Have had both vodafone home and mobile accounts for years. They still cannot give me both on one bill. Rumour is there is some pretty big backend stuff the needs big $$$ to get up to scratch to get the two systems together. I wonder how much legacy IT platforms need upgrades / replacing. I suppose it's best for vodafone UK to wait until after listing to fix these issues.

[Jantar]

Have had both vodafone home and mobile accounts for years. .... As have I. But moved both away from Vodafone this month in response to the closing of their email service. It is the difficulty of transferring email addresses that ties a lot of people to a particular provider.

[rmnz]

Yes they are a global brand but I don't see them leveraging their global capabilities, they certainly haven't brought much to NZ from what works well for them overseas.

Also, they are still essentially just Telstra Clear with a different coat of paint. The comment below about ageing and creaking systems is very pertinent.

[Marilyn Munroe]

Don't bother changing to 2 degrees broadband. They have stopped new customers opening e-mail accounts. I am guessing the end of their mail server is nigh as well.

SNOOPY

Those of you left out in the cold by Vodafone's and other providers email drop and wish to avoid being absorbed into the dark void of Google can use my solution.

1. Register your own internet domain. Cost about 30 bucks a year.

2. Sign up for an email hosting service. Coats about 80-100 bucks a year.

Advantages are;

Unlimited mailboxes. Give your cat an email address.

Creates a professional impression if you are running a small business. and

Freedom to chop and change broadband providers without the hassle of changing email addresses.

I use NZ provider Discount Domains but there are plenty to choose from.

How about this example;

tiddles.cat@munroe.net.nz

Boop boop de do
Marilyn

PS Not a real cat or email address. Any smooching in my house is my job.

[Entrep]

You can get one free email address using a custom domain at Zoho.com

[Jerry]

I don't quite like the way Vodafone said they will continue to forward emails to a new account for their customers. I read that as they won't be forwarding mail, if you change landline etc to another provider. Do they have a duty to forward emails anyway?
I personally will be reluctant to give my tuppence to their IPO.
2 degrees are excellent in my area for mobile. It's a matter of checking https://www.2degreesmobile.co.nz/coverage/

[BlackCross]

I don't quite like the way Vodafone said they will continue to forward emails to a new account for their customers. I read that as they won't be forwarding mail, if you change landline etc to another provider. Do they have a duty to forward emails anyway?
I personally will be reluctant to give my tuppence to their IPO.
2 degrees are excellent in my area for mobile. It's a matter of checking https://www.2degreesmobile.co.nz/coverage/

At the moment I believe that if you leave Vodafone you loose your email account unless, that is, you pay about $5.00 a month (or around that figure) to keep it open. Hopefully they'll offer something similar after the float?

[peat]

I don't quite like the way Vodafone said they will continue to forward emails to a new account for their customers. I read that as they won't be forwarding mail, if you change landline etc to another provider. Do they have a duty to forward emails anyway?

I'm not reading it that way. I have an email of theirs but am not a customer. They have already started forwarding emails to my new address, and I am expecting them to continue to do so after the 30th. I guess we will know very soon.

[BlackCross]

We were about to leave Vodafone a few months ago and were told we would have to pay a monthly fee to have email access ($5 or $10 monthly, I can't quite remember?). However, just looked through the FAQ they issued recently and it says:
What if I leave Vodafone?
We will provide auto-forwarding to everyone for as long as they want it. This will be at no cost for Vodafone customers, and for the time being it is also at no cost for people who leave Vodafone.
If we look to review this position, and to introduce a charge for customers who have left us, we will give you three months’ notice.

[peat]

We were about to leave Vodafone a few months ago and were told we would have to pay a monthly fee to have email access ($5 or $10 monthly, I can't quite remember?). However, just looked through the FAQ they issued recently and it says:
What if I leave Vodafone?
We will provide auto-forwarding to everyone for as long as they want it. This will be at no cost for Vodafone customers, and for the time being it is also at no cost for people who leave Vodafone.
If we look to review this position, and to introduce a charge for customers who have left us, we will give you three months’ notice.







Indeed
As I expected still receiving emails sent to my old vodafone address at the email address I advised them to forward to.

But more to the thread, when is the IPO happening?

[ohpark0119]

completely irrelevant, the webmail portal is still up. i can still log in and send emails.

-- following up
the portal is up but cannot log in.

[trader_jackson]

Things are definitely still 'happening'... interesting article in AFR Street Talk a few days back regarding Vodafone NZ's first pitch to Aussie fundies.. which mentioned various things including that Vodafone was "promising top line growth, stable earnings margins and chunky dividends for investors".

It could be a $2b offering (with vodafone having a market cap of $4b), more presentations to come early 2018 - it is 'definitely listing' in 2018, so Vodafone's UK parent company says.

[Baa_Baa]

completely irrelevant, the webmail portal is still up. i can still log in and send emails.

Yes, it's still up. Muppets.

[bull....]

be a good addition to the market , big company steady earnings

[QOH]

They are about to lose me as a customer, I see they have just put my bill up by 10 dollars a month, the main reason I stayed was because of my email address, but now that's sorted, I have no incentive to stay.

[hardt]

I have a feeling they are listing as they are noticing their market share shrink in NZ.

Anecdotal evidence - not a single person I know is with Vodafone for fibre or cell anymore... keyword "anymore"

Better deals everywhere else.

[couta1]

be a good addition to the market , big company steady earnings Spark a better choice, bigger not always better, look at Telstra of late as an example. PS-Was very happy to ditch Vodafone a year ago.

[Leftfield]

be a good addition to the market , big company steady earnings

Much depends on what 'debt' they are saddled with...... I'm not convinced.

[bull....]

much like spark vodaph if adapts to the new worls sucessfully could be staedy income earner wouldnt classify either as growth at this point in time

[BlackCross]

Very, very recently (days not months) our download speed over Vodafone has suddenly doubled from around 6 Mbps to over 12 Mbps. Whether this is down to people leaving Vodafone or that Chorus have run fibre down the street (but not yet offered a fibre connection to us) I don't know. What I do know is that it's a damn sight quicker.

[Beagle]

I have a feeling they are listing as they are noticing their market share shrink in NZ.

Anecdotal evidence - not a single person I know is with Vodafone for fibre or cell anymore... keyword "anymore"

Better deals everywhere else.
Everyone I know refers to them as Vodafail...absolutely shocking service.

[macduffy]

This possible IPO hangs in limbo but meanwhile its CEO tries to convince us that we don't really want to speak to a human being in their call centres.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12192385

[100101]

As soon as fibre is fully operational in Wellington Christchurch and Auckland Vodvoles cable moat is gone. Cant come soon enough for me, there is then little reason to put up with their rudeness and uselessness.
Probably wouldn't buy on an IPO but could be tempted after the drop on the first day of trading.

[macduffy]

He's absolutely right. CS staff are rubbish. All you get is excuses and bozo questions, not solutions. If you a good result, DIY it. :cool:

I suppose that's one way of getting rid of them! And cheaper than training.

:rolleyes:

[GTM 3442]

I suppose that's one way of getting rid of them! And cheaper than training.

:rolleyes:

My experience with Vodafone was that they had very good, very capable, people, who wanted to do a good job, and to do the right thing by the customer and the company, but that those good, capable people were hamstrung by truly dreadful internal systems, processes, and procedures.

Some of the sues seem to have been related to growth by acquisition, and the need to maintain various legacy systems.

However, whatever the cause, they eventually they paid me what I wanted, after which I left and moved to another company.

[Balance]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12211374

The Pig is being given a major makeover and dress up - you have been WARNED!

[Marilyn Munroe]

Have they integrated the Bell South / Telstra-Clear billing system yet?

Boop boop de do
Marilyn

[winner69]

Vodafone had tens of thousands of disgruntled customers on Saturday

Underinvestment in critical infrastructure caused the problem social media says

[Balance]

Vodafone had tens of thousands of disgruntled customers on Saturday

Underinvestment in critical infrastructure caused the problem social media says

No reason for them to invest when they are wanting to sell - unfortunately NZers are suckers so they will get away with it too!

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12211416

Meanwhile, they are looking to shift jobs to India (every dollar saved = $15 extra for Vodafone in IPO value).

[blackcap]

No reason for them to invest when they are wanting to sell - unfortunately NZers are suckers so they will get away with it too!

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12211416

Meanwhile, they are looking to shift jobs to India (every dollar saved = $15 extra for Vodafone in IPO value).

I was on the phone with vodafone last week to sort out an issue with sim cards on my account. What a nightmare. Seriously took about 45 minutes to sort out a cancellation of an extra 2 sims I had on my account. Could not do it at the local store, had to go through the 0800 number. For that alone I am going to ditch them at the next opportunity. It was horrible. The first lady (from phillipines or india) could sort out the cancellation but then could not tell me my outstanding balance and had to be transferred to another department. More waiting etc etc, and got transferred again. I cannot believe that a company of their supposed calibre would want their customers getting so pissed off.

[stoploss]

inside goss. Apparently IFT in talks to buy Vodafone.

Not that inside when it's already in the AFR ......

[silu]

Not that inside when it's already in the AFR ......

i know i know i've deleted my post.

[Snoopy]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12211374

The Pig is being given a major makeover and dress up - you have been WARNED!


Five years down the track and no IPO as yet. But current 'One NZ' (as 'Vodafone NZ' is now) CEO Jason Paris has some ideas on how he can make his company work better. Perhaps there are lessons here for other Telcos too?

The link to this video interview is here:
https://www.nzherald.co.nz/business/how-big-tech-is-crushing-telcos-what-one-nzs-jason-paris-plans-to-do-about-it/LJTXCUJXZVDXNGV3DGKEK6ZCUU/

Headline quote:
"They (the multinational techs like Microsoft and Amazon) are getting margins off our infrastructure. 4G and 5G invested in by us, to give them the speed and the latency that their applications are enjoying. We are providing 'business class' for economy pricing, and that is not sustainable."

'One' is now facing its own threats: Higher wholesale input prices, losing margin to major tech players, and customers demanding better service at lower prices. It means the incumbants of a 3 player oligopoly are having to innovate at a pace unlike ever before. Their ownership structures may differ. Spark is publicly listed, 2 degrees is privately held and 'One' is owned by listed private equity outfit Infratil. But ultimately they are all trying to win in an increasingly difficult market.


------------------

Interview is with the Herald's Madison Reidy.

MR: "People and business are doing it tough. How bad is it out there?"

JP: "Pretty messy. We saw some of the trends early. First of all around bad debts. We have our highest bad debts in 17 years at the moment. And that is just with customers struggling to pay. You can imagine the devices that customers are buying are more and more expensive now. A lot of the time they are paying them off interest free over a period of time, and we have seen customers struggling a bit. We nurse them through that like other industries are, and then we started to see businesses tighten their belts, deferring those big IT programs of work by 6 to 12 months. Then we have seen the wave of restructures coming through in every industry, including the government, and public sector, which we have a pretty large market share in. Those are the two headwinds that we have seen (consumer and business) and the next twelve months looks like it will continue to be more of the same with conservative investment, homes being hit in the pocket. Down at the moment in Invercargill (JPs home town) , talking to SBS bank, quite a large percentage of their customers are rolling off a sub 3% interest rate, moving to six or seven this year. So they are also working and scrambling to make sure they help their customers navigate through that as well. But it doesn't matter what industry or who you are, you are finding it much more difficult."

MR: "How big is that bad debt scale and how much do you have to provision for a potential work through of it?"
.
JP "It is in the millions. It's significant and it's a challenge for us. You don't like surprises in any year that you struggle to negate. But we are lucky that we have hit the middle of our guidance. I know others haven't been as successful. But looking ahead it is still going to be a pretty challenging economic environment for all businesses and all industries."

MR: "You are private equity owned and have been for a while. Can you take me back to what your initial thoughts were when private equity started buying up One NZ, and what your thoughst are now that you have had a bit of time with them?"

JP "I was about a week into the job and I got told to get on a plane fly to Singapore and meet the potential new owners who had just agreed a price with Vodafone group. Fast forward I have been here five years so you can tell we got on pretty well. And look, PE has been phenomenal. I have worked in government owned, publicly listed and PE owned structures."

MR "Can you rank them 1-3?

JP ":I think PE is number 1 for me, purely because they are always looking at long term value creation. And even when one of their businesses might be in challenging economic times, they have normally got their bets spread, where they can redeploy capital across industries and across businesses to where the opportunities lie. Often with PE, their biggest opportunities is in these environments, because they can continue to invest wisely. And those companies that continue to invest come out the other side of a challenging economic environment, much stronger than those that are a bit more tentative and conservative. Infratil and Morrison? Amazing owners. I love their purpose which is investing wisely in ideas that matter. So that's a long term view on the industries they are invested in, and we are benefitting."

MR "One of the reasons that PE owned companies thrive is that it is no secret that PE owners drive operational efficiency. How has your PE owner changed the operations of OneNZ? What are we talking, in terms of restructures and offshoring?"

JP "My PE owners start with 'Be the best at what customers value the most'. Because we know that if our customers want us, we know we have got a sustainable business. And so it has been a pretty simple strategy: Network, service, product, pricing. That has been the last five years of this organisation's life: Investing in all four of those areas. That is a great thing, as opposed to the Vodafone group that wanted to consolidate more into Europe and Africa, and Vodafone were investing less in Australia and New Zealand. We have now been able to deploy the capital to significantly improve the performance of the product. Clearly Infratil want a return on that. We have got tail winds in Infrastructure with our mobile towers deal. Our investors doubled their money. And a good deal for Spark investors, a good deal for MacQuarie who owns 2 degrees. So the industry has benefitted from a rising tide. Then there is a lot of operational efficiency we will be able to gain here just through running the business better. Like service improvement. We are the only Telco that publishes our service results every single day, because we are so proud of them (yet we know we have got a long way to go). But that reflects on a lot of cost to operate because if we have fewer customers calling us, if they do need help, it means we sort it first time, it means our products are better designed, it means our experiences are more digital. All of those things benefit our customers and also benefit our owners at the same time. I can genuinely say to you that I have never felt at any point in time in the five years, that my owners have asked me to do something that isn't in the best interests of our customers. Which is a great position to be in, when you are PE owned."'

MR: "On service, how would you rate it currently, out of ten?

JP: "Six, for our ambition. But as I said before I think we are if not the best, we are up there with the best now, because we are publishing transparently our results. So I would give our industry a six out of ten. I don't think we cover ourselves in glory in New Zealand or internationally for Telcos being seen as this bastion of customer experience excellence. But we should be. You know, if I say to the team, when was the last time you called Netflix? We are a digital subscription business. Why are people having to call us to get advice or whatever because they have got an issue? It shouldn't be happening."

---------------------------

SNOOPY

[Snoopy]

To help afford improvements in service, the type of infrastructure Telcos own has been shifting. 'One' and Spark both sold hundreds of cellphone sites nationwide in 2022. This is the physical poles, in deals to offshore investors worth about a billion dollars each. Usage of the active part of the network that they still own has been climbing, with data usage up by 23% in the past financial year. 'One' just spent $70m in building and upgrading more than 300 of those active mobile sites. The tech behemoths are set to benefit from that: Amazon Web Services, Microsoft Azure, and Google Cloud. Their data centres store information, an asset that is increasing thanks to the investment in 4G and 5G. Their revenue has sky rocketed compared to revenues in Telcos globally over the last four years. For that reason they are an investor favourite, with the market caps of Alphabet, Amazon, Microsoft and others leaving Telcos in the dust. But their relationship is also symbiotic. For example 'One' is using AWS to build its own internal AI models. But should Telcos have to foot the bill alone for the next infrastructure investment? And how awkward would that conversation with the big tech giants be?

----------------------

The Madison Reidy interview with 'One NZ' CEO Jason Paris continues.

MR: "Can you explain to me how the scale and influence of these big tech companies, aka the hyperscalers, are changing the telecommunications industry currently?

JP: "They have done an amazing job of monetising demand. compared to the telecommunications industry in New Zealand and globally. If you look at the advancements that have happened in devices, we are paying a lot more for those devices now. If you look at the hyperscale applications that they have launched: video calling, or migrating your data to the cloud, those consumption charges mean we are paying a lot more now. The Telcos, we have built the infrastructure that those devices and those applications use. A 30% increase in the use of our infrastructure every single year. Our prices are not going up, I can tell you that, by 30% every single year. We have as an industry, not done a great job on monetising demand. That is our issue. But because there is more demand, driven by the device manufacturers and driven by the application providers, we are seeing an increase in cost for us, that they are benefitting from."

MR: "So they are crushing you on margins?"

JP: "They are making the margin off our infrastructure, and loving it along the way. Because we are investing in 4G. We are investing in 5G. The speed and the lower latency that their applications are enjoying, we are definitely not charging more for. And so it is a really interesting time for our industry going forwards. We have just spent hundreds of millions of dollars upgrading to 5G. the usage cases haven't been there for us to monetise. But they have been on 4G and 5G for the application providers. So that is a challenge for us. One of the ways we think that we can do a better job looking at our own backyard first is by unbundling our services more transparently. We look at other industries that we think have done it quite well...."

MR: "....Like Air New Zealand for example...."

JP: "Yes, perfect example, 'seats to suit'. At the moment we are providing 'business class' for economy pricing. And that is not sustainable. But if you just go to a customer who was previously paying economy and say you are now being charged business, that is not acceptable either. What I love about the airline industry is that they have unbundled it. So if you want just a seat you get this. If you want food you get this. If you want entertainment you get this. If you want a better seat you get this. If you want priority boarding you get this. I think that is a very interesting construct that the Telco industry and ourselves can learn from, and should be investing in: That quality of service, unbundling and delayering. The other thing that it does is that it shows our customers there is actually a cost to us to provide that service, that we have been hiding from you for quite some time. There is a value exchange..... "

MR: "....The cost of this to these hyper scalers is so much lower....."

JP: "Correct. And then you have got the other analogy, which is we are kind of providing a highway. We have just been successful in acquiring the 'Dense Air' spectrum. It is like another lane in the highway. But it wasn't free. It is tens of millions of dollars we have been investing to get this other lane on the highway. And again there should be value exchange. It shouldn't just be that the application providers can just go 'Thanks very much I will just take that for free and monetise that demand'. When you are building a highway there is normally some form of road user charge...."

MR: "...or a toll road....."

JP: "Or a toll road, whatever it ends up being. I think those are interesting themes that we need to consider, because the sustainability of our entire industry is reliant on the quality of the infrastructure that those applications and devices are connected to. And in a country the size of New Zealand, where we are challenged by our population, you want to make sure that you can continue to invest in the next generation of digital connectivity as it comes along, so we can run the best businesses from New Zealand, and expand and connect globally, because we have got digital infrastructure here that is world class. I think we did that really well with fibre. We need to do the same thing with 5G, 6G, 7G"

MR: "For 6G then, this is a David verses Goliath story. You are not Goliath in this one. So what, do you call Google Cloud, Microsoft Azure, Amazon Web Services and say 'You pay for 6G!'?

JP: "Well first of all we talk to our vendors and say what are the usage cases? What are the ways that you think that we can monetise this next wave of technology which is inevitably going to cost us hundreds of millions of dollars? I don't know whether that is through the hyperscalers or the application providers, or the device manufacturers. All I know is that it can't be us wearing all of the cost and others always benefitting from it for the next ten or twenty years. Something has got to change. And the first place we always look at when something has got change? What do we need to do better? We do a better job on what we can control verses other things that are maybe outside of our hands."

MR: "The next wave of technology is artificial intelligence, perhaps according to some even AGI 'Artificial General Intelligence'. What's your view on that? Do you think we are heading for AGI? And if so when?"

JP: "I think we are. I think you have just got that next stage of generative AI coming through where smarter people than me threw a whole bunch of data and computing power at existing applications and were surprised at the quality of the answers that came back."

MR: "Have you used Chat GPT4.0 that came out this week?"

JP: "I have tried to. I have got Chat GPT. But the 4.0 I think is being nursed through the different markets to get all of those amazing use cases that I have seen which are being hyped up on launch. So I will definitely be an early adopter of that technology because I think it is a game changer. My view on artificial intelligence is not necessarily that your entire role will be removed. But there are hours of your week which are not as productive as you would like them to be, or that you just hate. Wouldn't it be cool to throw a robot at that and 'make it easier' or 'remove that'? So I'm telling my kids, I am telling my team. It is not necessarily AI that will take your job. But someone who knows AI better than you will. So the best way to make sure it doesn't happen is to 'lean in' and to use this technology. So I think Generative AI: It is not just something that can benefit businesses of our scale. Anyone can think about generative AI, in terms of using imaging to survey your infrastructure or land, to create job descriptions, to create presentations, to take notes of your meetings, to summarize contracts for you.....These are things that any business, whether you have got five people or five thousand people. You are probably spending too many hours 'on it', and AI can help.

MR: "Maybe you could ask ChatGPT to do that hardcore AWS (Advanced Workstations and Systems?) for you to play with 6G?"

JP: "I have asked Chat GPT are the Warriors going to win the premiership and the result is yes 'Up the wahs.'

MR: "(laughs), Still on hyperscalers, how are you at 'One' adopting AI? I understand you are using AWS to build those Large language Models (LLMs) to help you analyse customer data. Can you expand on how you are using it and to what advantage for who?

JP: "So we are partnering with Microsoft and Google and AWS. It will depend on what part of the business you are looking at. In service? Yes AWS, we are one of the first adopters of the' AWS Connect' contact centre platform. In fact we are now expert at deploying that for our own customers. What that basically does is that it allows us to take all the structured service interactions from all different channels and then 'structure it for us'. So you think of all the hundreds of thousands of ways that customers interact with us: Whether it is calling us, or coming into a retail store for a chat or a text message or on social media.whatever it ends up being. We can take those, and then we can rank them on 'where are the biggest pain points for our customers?' Is it a product? Is it a partner? Is it a journey? Is it a process? Is it policy? And then we can fix it. And so that's how we prioritise our backlog of service improvement. But we can do the same thing with networks. So we can look at an individual user's experience on our network at a point in time and we can work out whether it is a 'coverage issue' or a 'connectivity issue' that we need to address, and whether we need to expand our network or invest to improve our network through infill. All of those things, AI is helping us across the organisation. And then there is a whole bunch of stuff that has been around for years. So we use a lot of AI within our marketing for testing advertising campaigns, testing price points, data driven decision making. So there probably isn't any area of our business that hasn't got some form of AI, whether it is Large language Models or robotic process automation or just simple data making data driven decision making happen."

SNOOPY

[Snoopy]

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Jason Paris has just cut a deal with Elon Musk's SpaceX. To be the first Telco here to launch its Starlink satellite cell service. 'Text' is coming at the end of this year. And voice is set to follow. 'One' initially claimed the deal would give the country 100% mobile coverage. Regulators made them tone down that campaign. But Paris does believe it will save lives, allowing anyone to call emergency services from the most remote areas. It obviously comes at a cost. So 'One' is rethinking: How will they make customers pay for it?

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The Madison Reidy interview with 'One NZ' CEO Jason Paris continues.....



MR "Shall we talk SpaceX?"

JP: "Let's talk SpaceX.

MR: "Does SpaceX need 'Starship' to launch that number and that size of satellites, or can they do it on 'Falcon 9'?

JP: "They can do it on 'Falcon 9'. So there is an average I think of about 100 satellites that can be launched on 'Falcon 9'. Four times that on 'Starship'. They can launch every six days. I think we have doubled the number of satellites we have got up over the last month alone. So it is super exciting. And it's going to be a life saving technology. So it doesn't matter if you are twelve nautical miles out to sea on your fishing boat. If you can see the sky and you have got a Smartphone in your pocket, you will be able to text and we will be able to see where you are in relatively real time. And that is like amazing. New Zealanders we are a nation of explorers. We love mountain biking and rock climbing and fishing. And so just by having your smartphone in your pocket and being able to be connected that is fantastic. Another thing that is pretty cool about this technology is that the other countries that come on line, we are partnering with them. So Australia is committed. the US, Canada, Japan , Sweden and more will be announced. And what that basically means is that if you are with 'One' in New Zealand and you are in any of those markets, if you are outside of the normal 4G/5G mobile network coverage, you will still have connectivity via space. So that is pretty remarkable. I have said to people you could get in a boat in New Zealand, sail across to Australia, -once this service launches with your smartphone- and as long as you can see the sky you will be connected. It's pretty wicked.

MR: "We have already spoken about valuing increased better services. this seems like one of those. So how are you thinking -early- about how people pay for this? How much are they going to have to pay for something like 100% connectivity in the middle of a boat in the middle of the pacific Ocean? "

JP: "So we want as many of our customers to access this as possible. And so the starting position is, on our most popular post paid plans. We have committed to this for a long period of time. We are most likely going to 'bundle it in' as part of the plan. So if you are a business or a consumer customer and you are with us for postpaid, then it is most likely to be bundled in. If you are a prepaid customer, which means you are only committing to us for 30 days, or you are on a lower value plan, we are thinking that it might be a $5 charge a month, or something like that. And that is not a massive commercial barrier for most people if they genuinely want this level of connectivity, when you are connected to 4,000 satellites flying at 27,000km/h in sequence, flying 100km above your head for five bucks. Pretty good technology!"

MR "You are not a charity though. So how many customers, extra customers, do you need paying $5 a month for how long to break even and then even profit on the SpaceX deal?"

JP " We want thousands of customers more to join us because of it. So again we are not a charity, and this is an investment that we've made because we think it's great for this country and great for our customers. But as you said before, this is not free technology. So one of the benefactors of our brand change, where the rebrand from Vodafone to One was made for a whole bunch of reasons. But one of them was that we could stop paying the licence fee to Vodafone Group and instead invest that licence fee in New Zealand. A large chunk of that licence fee has been invested in our SpaceX partnership, and I can say to you that I couldn't be happier about it. It's a great investment, and we are confident and we are already actually seeing a number of customers joining us and saying that it is specifically because of our partnership with SpaceX."

MR "You have a wait list don't you? How many people are on it?"

JP: "Hundreds. So ....."

MR " ....You need thousands.....

JP: "Yeah we do. There is a huge amount of interest from a whole bunch of different customers to be a part of this technology and why wouldn't you be? So again, life changing technology."

MR: "Nothing though is stopping SpaceX from advertising itself directly here. They already are. Some people have already signed up for it. For example my fiance's family who live out in the country out of Nelson, they use Starlink for their internet at home. What do you think about that? Are you worried about that as a risk, or do you think not enough people know about that yet?"

JP: "There are two types of Starlink technology."

"One of them is direct to cell via your mobile. The other one is direct to your home or business for broadband. The direct to broadband service, you can get extraordinary speeds. But on average Starlink talks about 50 megabits per second. That is not as good as 5G and not as good as fibre. So we think it is complimentary technology. It is complimentary in two ways. One is where it is uneconomic for us to invest in 5G, or for the government to fund fibre. Mainly in regional or rurally remote areas. Then Starlink is fantastic as a way of being able to keep connected, or being able to stream high definition video or do what you need to do for work. But if you are in an environment where you have got 5G or fibre access, then those are more cost effective and offer a better service. The other thing we love about Starlink is if there is a power outage, or a natural disaster, it is a fantastic back up option. So a lot of our business customers have purchased Starlink connectivity as a back up to their existing 5G fibre installation with us. Because productivity is so critical for them. I recommend it to my mates in Southland where 5G and fibre isn't available as a service that you should go for."

"The satellite to mobile. It is more like 5 megabit per second. You are not going to be streaming high definition video on your phone. There is a restriction because the receiver in your device compared to the satellite dish that your broadband is being received from Starlink is way different in size. And so again the connectivity that Starlink to a cell will provide is complimentary to 4G or 5G. At least while I am here I don't think of the next ten or twenty years.that what Starlink will provide is going to be superior to 5G or 6G or fibre. But I never count out Elon Musk.

MR: "I wouldn't bet against the guy either." "All of these things Jason sound so cool and cutting edge. Yet so much of the telco industry is so archaic. For example, if I jump onto a flight right now and go to US and I get a SIM from AT&T or another company, and I answer a call from back home, it will charge me something like 30 bucks. So how are we so far ahead to the point where we are launching satellites into space for more connectivity around this world, yet some things are still so far behind?"

JP: "I think it just comes down to, there is a large backlog of things that we need to work on and you can't fix them all at once, so as I said at the start, our strategy with our owners is be the best at what our customers love the most and value the most. And there is a list of 100 things. You can probably only focus on five at a time. So for us: really strong resilience of infrastructure, making sure our services tend to work. Those are the types of things we are investing our money in. But I guess there is no shortage of opportunity in our industry or our own business. It is just the order in which we do them. And I say this to the team the whole time. You can generally bring a sleeping bag into this organisation and work here 24/7 and never get through all the work and all the opportunities that this organisation presents. Which is why we love it!"

MR: "I feel a bit the same, if I am honest (laughs). If you don't mind I would like to talk about some societal issues, because you are quite vocal as a high profile chief executive. I would like your thoughts on some things."

JP: "OK, now you have got me worried."

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SNOOPY

[Snoopy]

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'One NZ' is currently battling with less than 100 staff about its 'work from home' rules. It hardlined a policy enforcing call centre staff to be in the office at least three times a week. This had lead to protests outside its Auckland office. But it is not the first time the company has had to publicly defend its policies. In 2020 it was criticised from changing the network name on public devices from 'VF New Zealand' to 'VF Aotearoa'. Some customers threatened to leave the telco, but competitors came in to bat, saying they too defended the use of Te Reo Maori.

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The Madison Reidy interview with One NZ CEO Jason Paris concludes.....

MR: "We will start with an easy one on the future of work. How many days preferably would you like staff in the office?"

JP: "Ah, three but I'm here for five because otherwise I would be watching sport on TV at home because I am so easily distracted because I love sport. Look, we think three is the right mix. But if you want to be here for five, like me, then go for it. On the basis that it is three anchor days self determined by the team. We think it is best for productivity, best for mental health and best for training and development. And we have got data now emerging on that, that we can share with you. But look in the other two days, they normally come up because there are certain times when you just don't want to be interrupted and you just need quiet time to concentrate. Or something is happening at home and you need to support a family member or a friend, or you actually just need some time for yourself.. That's all good too. The reality is for most of us its not five days a week its kind of seven days. It's seven days family, friends and work all at the same time at the moment. So, I've never missed a moment that has been important to my wife or my children in the whole time I have been here. What with school assemblies, the certificates, and I've coached their cricket teams and their rugby teams and all that kind of stuff....

MR: "....Are you a loud parent, are you one of the ones yelling from the sidelines?...."

JP: "...No, I am very quiet, a very very quiet parent. But at the same time I make that prioritization call, but then I will do some e-mails and work at 10 O'Clock at night. Or on our own afternoon on a Sunday. Just having the ability to be able to make those choices. Look I think three, maybe even four, anchor days would be appropriate. I feel like since Covid that three is the right amount. I have to say I have been surprised at the amount of publicity and the chat that we have had around our commitment to having three days back in the office that the teams can self determine, but we are having to lead it out."

MR: "Another thing that has been a large conversation, is your brand 'One New Zealand'. You even say that it represents and tries to identify 'one New Zealand as a society'. Yet it feels like as a society and a country we are currently more divided than ever. And it is sort of being driven by this woke verses anti-woke sentiment. It is now being pointed at corporations. There was a statement 'Go woke, go broke'. For those kind of companies that highlight their diversity and inclusion policy, which I think were just a defence of social progressiveness. Within that defence, do you think that companies and corporations have got it right?"

JP: "I think two things on that one. Number one, It is a data driven fact that diversity of thought gets better business outcomes, for your owners and for your customers 100%. And so it is just a good business decision to have a more diverse workforce, whatever that diversity looks like. It could be gender, it could be ethnicity, it could be age: Whatever you decide it needs to be. I love the fact that my exec in this team is so diverse in its thinking. It is difficult to navigate and manage through some times. It takes a lot longer to get an outcome - sometimes. But the outcome is almost always better. So it is a smart business decision. And then you have other things that I think are really important for New Zealand. So I think our identity is important and I see Te Reo, personally, as an important one. But for me when I talk to our customers and i send three or four e-mails out a year, then i always say 'Kia Ora', because I say 'Kia Ora' or 'morena' all the time. But I also say children because I very rarely say 'rangatahi'. So I say what is comfortable for me. I don't want to force my views on anyone else, in that regard.

MR: "That is exactly the point of my question. Do you think corporations have crossed that line, recently, in terms of trying to enforce ideologies and agenda's on people, and that isn't historically the role of a corporation?"

JP: "I wouldn't say it. I haven't seen any examples of it being forced. That is not, I think, any corporation's intent. All corporations hopefully know that they want to ensure that the country they are operating in is a high performing one for generations to come. And part of that is making sure that we are a healthy, happy, smarter, more productive and more inclusive society. That is the intention. I think people are misinterpreting corporate intention if they think it is about woke or there has been some forcing mechanism. And the thing that annoys me probably the most is the distraction to the real issue which is we are arguing when we actually agree. And what I mean by that is often you find that the outcome that you find that you both want, whether it be at an industry level or at a political level is exactly the same. You just disagree on maybe how you get there. Let's stop arguing about the 20% of the stuff that we disagree on and start spending all our time on the 80% of stuff that we do agree on. Look at our own political environment. 'Centre left', 'Centre right' , 'Centre' - right? Does any party that is in government not want a healthier smarter, safer New Zealand? No, we all agree on that outcome. Let's instead get in the room and go: 'What's the best way to get there?', and then let's commit to it, work together, to get it done, instead of arguing on the fringes. It drives me bananas whether it is someone on social media and the local facebook community page or in big business like ourselves that we miss the big picture and ultimately we are stronger together, we agree on most things most of the time. Put the rest of the stuff in the parking lot,,and just concentrate on making this country the best place to live and work for this generation and generations to come. That is what I get excited about."

MR: "If you don't mind me saying so Jason, you are obviously a refreshingly transparent executive. You wear sneakers, puffers and rain jackets in an incumbent industry. How do you fit in here?"

JP: "It is part of the culture I inherited to be honest, I promise you. You stand on the foundations of others and I inherited a culture from Russell Stanners,, who was my predecessor, which was basically 'our customers are our most important thing' and 'our people are the most important thing in our business'. So I have actually found it relatively easy to transition in. I also think that being as close to our customers as possible, being really transparent and open 100% of the time about everything, is the best way to run business and the best way to run your life. So I am no different now, talking to you, than I am at home. And sometimes that gets me into some trouble, and most of the time that works."

MR: "I would love you to talk about that actually. It does get you into trouble on Twitter..."

JP: "Sometimes'"
https://thespinoff.co.nz/sports/09-05-2023/what-can-the-nrl-actually-do-about-jason-pariss-tweets

MR: "What have we learned from that JP?"

JP: "What I have learned from that is that there is no disconnect between me as a kind of dad, fan, husband, friend, and me as CEO of 'One New Zealand'. So I am those things all the time, 100% of the time. The second thing is my wife should confiscate my phone when I am off watching any sports."

MR: "Does she now?"

JP: "She does".

MR: "Smart woman"

JP: "Exactly."

MR: "Thanks so much for your time Jason, and for having a chat."


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SNOOPY