IOG Meeting Overview - August 2009

    Milestone Status Update

    Issues outstanding from previous periods

    The following items outstanding from the 1 May 2009 Milestone Status report are now closed:

    • IOG Support Office staff incentives.
    • Milestone 8.1G for Pilot of B2B Gateway & Online Portal (superseded by Variation to S1- 8.1G & I).

    Milestones and Undertakings - 1 April to 30 June 2009

    The following Milestones have been met for the quarter ending 30 June 2009:

    1. Update report provided quarterly to the IOG and Commission (S1-4.1).
    2. Service Desk Component built and ready for testing (S1-8.1 I).
    3. End customer trial underway for new Retail Broadband service consuming BUBA &/or EUBA (S1-8.1 J).
    4. Report provided to the Minister on the plan to meet the future PSTN transition Milestones (S1-12.2).
    5. Retail Units will withdraw X25 and Netway Integrated Access services (S1-16.1D).
    6. Design Document for the Wholesale Unit EOI Inventory Management Systems finalised and approved by the Manager of the Wholesale Unit (S1-8.1H).
    7. Service Desk Component of the EOI Building Block completed (S1-8.1 G).

    The following Milestone is pending closure for the quarter ending 30 June 2009, with no current concern being noted:

    1. UBA Backhaul full launch (S1-9.1A) - Incorporating UBA Backhaul soft launch (outstanding from 1 May 2009 Status report).

    In respect of the Tracking Milestones S1-5.1 K and S1-6.1 B (EOI Chorus opt in Milestones for UCLL and UCLL Backhaul respectively) due 30 June 2009:

    • the change in scope and delay was previously accepted by the IOG in April 2009.
    • the IOG have already written to Telecom expressing an Issue of Concern with respect to clause 79.1(j) regarding the delay and concern over the ability of Telecom to meet future related milestones.

    Future Milestones – 1 July to 30 September 2009

    In respect of the Tracking Milestone S1-12.1 E, External Trial for Primary Line Voice the deferral of S1-12.1 E to 31 July 2010 is not an issue of concern, subject to the following conditions being met:

    • Telecom provide acceptable interim tracking milestone/s to enable the IOG to ensure progress is being made on Release schedules such that the Release containing Primary Line Voice requirements will be on schedule with the new proposed dates.
    • Telecom provides acceptable interim tracking milestone/s to enable the IOG to ensure progress is being made to meet the enforceable milestone to have 17,000 Retail customers on the new service.

    It was resolved that the IOG write to the Telecom Board expressing an Issue of Concern with respect to clause 79.1(j) and Telecom’s ability to meet the enforceable milestone of 17,000 customers on the new Primary Line Voice Service consuming EUBA.

    Ms Tina Hammond, Telecom General Manager of Operational Separation and Release Management, gave an update on operational separation from a Telecom perspective.

    Audit and Assurance Reviews

    A number of Telecom internal audit reports were received and noted by the IOG.

    Complaints and Honesty Box Summary

    Honesty Box (Whistleblowing)

    The IOG identified one non-trivial breach from the Honesty Box submissions during the reporting period.  The submission concerned the Telecom Wholesale Loyalty Offers.  The IOG's decision can be found on the IOG website >> Reporting and News >>  IOG reasons for the decision re Vodafone and Kordia complaint against Telecom Wholesale >> Wholesale Loyalty Discount reasons.

    Investigations - Overview

    There were 441 Honesty Box submissions in May and 357 in June.  Both months were substantially impacted by Telecom Retail's audit of Short-lead orders, with 282 and 212 related orders in the respective months.  With the completion of the back-dated audit, the volumes of submissions should decrease from July 2009.

    Honesty Box Submissions

    The distribution of submissions across the business units from August 2008 to 30 June 2009 (excluding the abnormal month of July 2008) continues to be consistent with Retail accounting for 88.3% of the submissions; followed by Wholesale 4.4%, Chorus 2.2%; with the remaining business units under 2% each. 

    The percentage of submissions that are compliant versus trivial or de minimis continues to favour compliant at 62% [1 July to 30 June 2009], versus 10% being adjudged trivial or de minimis.  The remaining large percentage being the non-compliant short-leads (23%), which are subject to review prior to final categorisation. 

    Updating ‘The List'

    It was resolved that the IOG send a Issue of Concern to Telecom regarding ‘The List' not being updated for three months (1 January to 31 March 2009) as The List is a key control.

    Short-leads

    The IOG resolved that the overall occurrence of 909 non-compliant short-lead orders between 1 July 2008 and 30 June 2009 is a trivial or de minimis breach of Clause 88.2 due to:

    • the average of 76 non-compliant short-leads per month representing 0.0002% of the (average) 365,000 orders processed by Telecom Retail per month; and
    • no systemic intention to short-lead orders has been identified; and
    • Processes have been verified by the IOG Support Office to identify short-lead orders, auto-populate them into the Honesty Box, provide coaching / discipline to staff and to audit short-leads.

    It was further agreed that the IOG Support Office should annually monitor short-leads to confirm they have not become a non-trivial breach.

    Industry Perspective

    Mr Paul Reynolds, CEO of Telecom, provided the IOG with his perspectives on the first year of the Undertakings at Telecom. 

    Mr Mark Ratcliffe, CEO of Chorus, provided an overview of Chorus' Undertakings performance during the year ended 30 June 2009 and provided a summary of what Chorus needs to carry out during the year ending 30 June 2010.

    Mr Russell Stannners, Vodafone Chief Executive and Mr David Diprose, Head of Fixed Line Regulatory, Vodafone, provided Vodafone's views on Telecom's compliance with the Undertakings.

    Key Performance Indicators (KPI’s)

    Telecom has supplied KPI reporting for the period 1 April to 30 June 2009, covering the aspects of Customer Surveys, Staff Training in the Undertakings, PSTN Migration and Product Equivalence.

    Of note:

    The percentage of new employees who had undergone Undertakings training within one month of their start date decreased from 49% to 43% between the quarters, and an Issue of Concern has been sent to Telecom referencing this

    Report changes approved were:

    • Reduction of future KPI reporting to three times a year as opposed to quarterly, in order to reduce Service Provider surveying and potentially boost the current response rates that are between 40-45%
    • “Don’t know” option to be dropped from Customer Survey questions

    Other Matters Considered

    IOG Performance Feedback

    The IOG have completed a performance assessment process and received appropriate feedback.

    Media Approach

    The IOG discussed the appropriateness of media comment.  They resolved no changes to the current policy which is essentially one of "no comment".  The IOG also noted the Charter requirement to consult with Telecom prior to making a media statement.