Kordia dusts off trans-Tasman project, but no firm plans

CEO Geoff Hunt on Kordia’s move to consolidate telco businesses

Kordia “dusted off” its proposal for a trans-Tasman cable after the collapse of Pacific Fibre, but it has yet to make any concrete plans, says CEO Geoff Hunt.

“We’ve said this could be viable again, but we haven’t taken any further action at this stage,” says Hunt.

There had been a move to sell Optikor – Kordia’s brand name for the project – to Chinese telco Axin, but it never eventuated. However, in light of the failure of the Pacific Fibre project, while Kordia has looked again at the possibility, Hunt says, the focus has been elsewhere.

In August Kordia Solutions Australia won a $117 million contract to provide a communications network for APLNG (Australia Pacific Liquefied Natural Gas) coal seam gas project in Queensland. The Australian business has a turnover in excess of $100 million and employs up to 900 staff, Hunt says.

“We grew 35 percent across the whole group last year, we’re a $400 million turnover business, we added 400 people in Australia, so you can imagine where my focus has been,” Hunt told Computerworld.

Hunt was fronting media enquiries yesterday after an announcement that the company will consolidate its two telecommunications businesses Kordia Networks and Orcon into one business called Kordia New Zealand.

The announcement – which will result in job losses – followed speculation parts of Kordia might be sold off. So was the decision to consolidate an outcome of Kordia’s strategic review?

“The strategic review is probably a bit overblown by the news media,” says Hunt. “This is really just part of routine business, re-evaluation and carving the way to the future.”

The move to combine Kordia’s New Zealand telco business (which includes its broadcasting transmission service) is driven in part by the changes in the telco landscape, such as the Ultra Fast Broadband network, Telecom’s structural separation and – if the Commerce Commission gives it the green light – the sale of TelstraClear to Vodafone.

Part of becoming more competitive is moving the remainder of Orcon’s call centre to Datacom’s operation in Manila. Hunt wouldn’t say how much money the move will save.

“I don’t want to tell you the figure but it’s significant, but more importantly it enables us to focus on what we do well, which is product development, operating networks – quite a high engineering intensity in the business and we just know that Datacom are much better then we are at running call centres.”

Labour ICT spokesperson Clare Curran yesterday issued a press release slamming the move to offshore Orcon's call centre jobs, “This is part of a worrying trend for businesses to make cost cutting decisions at the expense of Kiwi jobs.The fact that it’s a state owned enterprise making the decision reinforces the lack of commitment by the National Government to investing in Kiwi jobs."

Hunt says Kordia has no intention of ditching the Orcon brand in the consumer and small business space and it retains the same marketing budget.

Kordia will hold a public meeting on November 27.