TelstraClear CEO Rosemary Howard says if TelstraSaturn and Clear had not merged the only alternative was to shut the TelstraSaturn network down.
Speaking at the fourth annual Conferenz Telecommunications and ICT summit, currently on in Auckland, Howard was responding to a question about TelstraSaturn's plans to build its own national network in New Zealand.
"TelstraSaturn spent millions on its network and was funded by 16 banks. When we spoke with our partners about the future of TelstraSaturn it became clear - either we buy Clear Communications or we close down. TelstraSaturn was not a sustainable company."
Howard reiterated TelstraClear's belief that the telco market in New Zealand must realise the days of being either a partner or a competitor are over.
"We buy from BCL, from Vodafone, we're Telecom's biggest customer. We sell to nearly all the other telcos as well."
Howard likened the situation to that of the PC industry and says New Zealand telcos could learn a lot from the way the PC market has developed its model of competing and co-operating.
"I spoke with Fonterra not long ago and they also employ a similar model. They compete with Bonlac, yet they also buy from and sell to Bonlac on a regular basis."
Howard believes New Zealand is not rich enough to sustain "stupid investment" in network infrastructure that simply over-builds an existing network.
"The telecommunications industry in New Zealand has been around for only 19 years and we're not very good at customer focus. We're not good at being commercial and internationally telecommunications companies lost between $3 and $6 trillion dollars in recent years."
Howard said every telco executive's "job is on the line" as the new regulatory regime comes into effect.
Howard also had strong words about New Zealand's international ranking and the impact of infighting among industry players.
"We must be allowed to compete and to partner in an effective manner. We can't be trying to impede each other's effectiveness to get ahead. It's not OK to be average or slightly better than that because New Zealand is the most innovative country in the world."
The conference, at the Crowne Plaza hotel, continues today.