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Telecom to refocus marketing after Cup

By Duncan Bridgeman

Friday 21st February 2003

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Telecom is gearing up for a new advertising campaign in the wake of its heavy sponsorship of Team New Zealand.

Regardless of the outcome of the America's Cup, the telco is trumpeting its promotional activities during the event as a success and wants to shape its traditional marketing along the same lines.

The company is also boosting the advertising budget for its Australian AAPT subsidiary to help turn around a decline in Australian revenues.

Marketing general manager Kevin Kenrick said new local advertising would roll out over the next few weeks as the company looked to capitalise on the exposure gained through the Telecom Shed on Auckland's waterfront.

More than 360,000 people have visited the high-tech pavilion during the past five months, making it one of the most visited attractions in the country.

The venue allowed the public hands-on access to Telecom products and new technology, including email photograph messaging, video-conferencing and Xtra's online gaming.

Mr Kenrick said the new advertising campaign would look to build on what was seen at the shed and focus on all parts of Telecom's business ­ not just telephones.

That could spell the end for the latest Telecom Mobile "TM" campaign, which has so far failed to make a lasting impression.

Mr Kenrick said traditional long-lasting campaigns such as "Spot" and "animals" were no longer a priority, particularly as companies expanded their business.

"It is easy for ads to become focused on selling what a company has got right now rather than looking at the future," he said.

"We need to be bolder and braver ... so expect to see Telecom taking a far more positive [marketing] approach to the future of communications."

The marketing will look to focus on three parts of Telecom's business ­ communications, information and entertainment, he said.

"The challenge for us now is to build on what we saw in the shed and use the same open style and content with fresh new ideas."

Telecom is also looking to increase advertising spend in Australia in the second half of this financial year.

Telecom bought Australian subsidiary AAPT at the height of the telco boom in 1999 but had since written down its value by a massive $850 million.

Chief executive Theresa Gattung said on Australian television this week the company would continue to review the carrying value of that business but as margins had improved it was time to raise the profile of AAPT again.

Earlier this month, Telecom reported revenue from its Australian operations of $773 million for the six months to December were down 17.7% on the previous corresponding period. The company said this was partly a result of targeting higher-value customers.

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