Case Call 0 For One
Call 0 for One.Tel by Corine Tay, Krishnasruthi Srivalsan, Tan Huijie, Teng Yun Ting, Yee Guan Wei and Yong Lin Lin under the supervision of Professor Mak Yuen Teen and Dr Vincent Chen Yu-Shen. The case was developed from published sources solely for class discussion and is not intended to serve as illustrations of effective or ineffective management or governance. The interpretations and perspectives in this case are not necessarily those of the organisations named in the case, or any of their directors or employees. This abridged version was edited by Low Jiemin under the supervision of Professor Mak Yuen Teen.
Case Overview
One.Tel was the fourth largest telecommunications company in Australia before its collapse in 2001. The management of One.Tel was able to conceal signs of financial distress in the company, arguably due to poor corporate governance in a number of areas, including board composition, board committees, internal controls, audit, and executive remuneration. The objective of this case is to allow a discussion of issues such as board independence, board committees, executive remuneration, role of auditors and regulatory enforcement.
One.Tel: the Beginnings
One.Tel was an Australian telecommunications company founded by Rodney Adler, Jodee Rich and Brad Keeling on 1 May 1995. Created soon after the 1993 deregulation of the Australian telecommunications industry, One.Tel positioned itself as a low cost mobile phone service provider. The company successfully launched an initial public offering to sell its shares on the ASX at A$2 per share, less than three years after it was founded.1
One.Tel’s business model was based on reselling excess phone capacity purchased from major telecommunications companies, such as Telstra and Optus. By engaging in predatory pricing, aggressive marketing as well as liberal extension of credit to customers, One.Tel aimed to secure a large market share in terms of number of customers. By the financial year (FY) ended
Case Overview
One.Tel was the fourth largest telecommunications company in Australia before its collapse in 2001. The management of One.Tel was able to conceal signs of financial distress in the company, arguably due to poor corporate governance in a number of areas, including board composition, board committees, internal controls, audit, and executive remuneration. The objective of this case is to allow a discussion of issues such as board independence, board committees, executive remuneration, role of auditors and regulatory enforcement.
One.Tel: the Beginnings
One.Tel was an Australian telecommunications company founded by Rodney Adler, Jodee Rich and Brad Keeling on 1 May 1995. Created soon after the 1993 deregulation of the Australian telecommunications industry, One.Tel positioned itself as a low cost mobile phone service provider. The company successfully launched an initial public offering to sell its shares on the ASX at A$2 per share, less than three years after it was founded.1
One.Tel’s business model was based on reselling excess phone capacity purchased from major telecommunications companies, such as Telstra and Optus. By engaging in predatory pricing, aggressive marketing as well as liberal extension of credit to customers, One.Tel aimed to secure a large market share in terms of number of customers. By the financial year (FY) ended