Nick Clarke, Spark: A bright spark Laura Hedges 11 Sep 2014 Brendan Rodgers led Liverpool FC to within an inch of claiming the English premiership last season. Despite narrowly losing out to Manchester City, the young manager’s philosophy of blending creative, progressive football with teamwork and discipline has won plaudits world over. Even, it seems, in New Zealand.“When they [Liverpool FC] make a mistake, he makes a point of saying how courageous they were to try it in the first place,” says Nick Clarke, GM of wholesale at Spark, who compares his outgoing management style to Rodgers. And with the New Zealand incumbent in the early days of its major rebrand, never has this ethic to explore new ideas been more important. Striking forward On August 8, 2014, Telecom NZ rebranded to Spark, which according to Clarke is just a small part of a much larger transformation. Telecom NZ/Spark has left behind its copper-heavy, fixed-line days, in favour of embracing the digital world. “We are now a digital service provider whose future is much more tied to mobile and digital services,” confirms Clarke. All areas of Telecom NZ’s business have migrated to the Spark brand, with the exception of its international arm, Telecom New Zealand International (TNZI) which will keep its name due to its international profile. The move is designed to better reflect the company’s new focus on mobile data, online entertainment, cloud services and the internet of things. Spark has already taken steps to realign its business, selling its Australian wholesale arm, AAPT, to Sydney-based ISG TPG Telecom for A$450 million in December last year, in a bid to refocus its operations on New Zealand. “The cash has been used to fund growth in our core market,” says Clarke. “For example, with the acquisition of New Zealand’s leading cloud provider, Revera.” The company has also used the AAPT sale to launch a new unit, dedicated to exploring new opportunities in the digital market. Called Ventures, the unit very much encapsulates Spark’s new focus on technology and will look to grow the company’s business in Wifi, Big Data, connected homes, internet and TV. The strategy may seem familiar. Carriers – incumbents in particular – are becoming fixated with self-reinvention and distancing themselves from traditional wholesale services. Similar projects have been launched by the likes of Telefónica, with limited success. But in a smaller market with less competition from OTT players, Clarke believes Ventures has more freedom to grow. “By the time eBay looked to set up in New Zealand, a young Kiwi had launched a local version and secured the market support which has kept eBay out,” he says. Netflix is also yet to launch in the country, enabling Spark to launch its own subscription video-on-demand service, Lightbox. Clarke describes New Zealand as a relatively informal place to do business, where reputation and trust count. “As a result we are much less tied by formal processes, and partnerships are built on a stronger foundation of trust, which means we can move more quickly,” he says. “Not trusting partners in a business comes at an intangible but significant cost.” As well as developing its media and technology services through Ventures, Spark is also aiming to grow its market share in broadband, mobile and cloud: “Cloud is also still in its infancy and we have invested heavily in data centres and a cloud provider as we look to grow quickly,” he adds. In July 2014, Spark partnered with South Korea’s SK Telecom; a company renowned for pioneering next-generation technologies. With increasing immigration and business between New Zealand and South Korea, the partnership further highlights the close ties between the two countries. The partnership will focus on developing Internet of Things (IoT) business services in three key areas; Smart Car, Telematics and Smart City. The two companies signed an MoU which has received approval from the Ministry of Science, ICT and Future Planning in New Zealand, and Clarke says that he sees a big future for M2M and IoT. “I am sure that we will look back and say that M2M had barely begun in 2014,” he adds. “It is going to be a huge growth area and we are increasingly focussed on rolling out networks that will better support these M2M-style services.” Working together, the two companies are exploring cost-effective IoT business items in a bid to develop the global M2M market. Spark’s wholesale business in particular is driving M2M growth, and has launched “developer packs” for budding entrepreneurs with ideas they want to test. This is a huge departure from a business that was previously a centre of regulation and only dealt with a handful of very large telcos, says Clarke. Working down under Competition in Spark’s domestic market has intensified in recent years – and Clarke believes it is reaching levels similar to the UK; a country he knows well from his four years working in London with ISP Woosh Wireless. Spark and its two rivals – 2degrees and Vodafone – all offer 4G services, and a race is underway to expand connectivity to rural areas. “I think competition from any carrier is good for us all – when it comes to demand, a rising tide floats all boats,” Clarke says. Spark responded to competition from Vodafone and 2degrees by securing the most 700MHz spectrum available in a recent auction. “We believe that long-term, a strong spectrum story will give us the best platform to provide great services,” Clarke says. Spark has also launched an internal MVNO called “Skinny”, to serve parts of New Zealand where the main brand is less strong. At the same time, the company has been working on a Wifi service, which it hopes will relieve pressure on networks in rural areas, particularly during peak holiday seasons. Being in the Southern hemisphere, Christmas and summer holidays coincide in New Zealand, and businesses subsequently close for approximately three weeks and people flood to small holiday homes called baches or go camping. In order to manage the drastic change in demand, Spark has been installing Wifi in phone booths and offering free Wifi to mobile customers. “It has become the springboard for a larger Wifi roll-out we are doing,” he says. The population density in the south of New Zealand is so low that there is no business case to land a subsea cable system there, nor does Clarke predict that it will require one any time soon. He does, however, exclusively reveal to Capacity that talks are underway to add a fourth subsea cable to the North Island. Although unable to disclose the full details, the cable will link New Zealand and Australia, providing greater redundancy. This, he believes, will sustain traffic demands until the late 2020s. Working in one of the world’s smallest English-speaking markets doesn’t come without its difficulties, but Clarke says that as a company, Spark has learnt by trying new things, regardless of the potential for failure. “Your biggest strength is often your biggest weakness,” he says. He explains that for a long time, Spark saw itself as a smaller version of Deutsche Telekom or BT and looked towards those companies for technology road maps. “We learnt the hard way that our scale meant this did not always make sense,” he says. “But we are now much more innovative in terms of new technology.”Managing the team As well as growing the business in new directions, Clarke is a strong believer of nurturing talent within the organisation. “If people know what direction they want to head in, then it’s incredible how opportunities open up from there,” he says. Like Liverpool’s Brendan Rogers, Clarke believes in giving people opportunities – pushing them to be bold, move quicker and implement changes that make a long-term difference. “We need to execute ideas more quickly and cheaply than we ever have,” he says. “And on the flipside we have learnt that the biggest risks we ever take are not in executing contracts, but in not moving.” Achieving the right work/life balance is important to Clarke, who has three children under the age of 10. He also puts back into the community by coaching a kid’s cricket team in summer and two football teams in winter. “I get the kids to try everything they see on TV, knowing they won’t always win but with the confidence that learning a technique will help them play better as they get older,” he says. “Coaches who play to win in the short-term do themselves a massive disservice in the long-run, as it involves little quality time with the ball.” And this is a philosophy he has also instilled in the workplace. “Let people make mistakes they are going to learn from; it provides a much better long-term environment,” he concludes.