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Right now she's spitting tacks (and her dummy).

What started out as a cushy job, administering the nation's monopoly owner of the local loop and dominant telco, has suddenly become a whole lot tougher.

Since Theresa took control, Telecom's profits have (until recently) continued to soar to new heights, buoyed at least in part by the company's ability to squeeze its competitors for unparalleled interconnect fees.

However, it's all starting to turn to custard for poor old Ms Gattung.

Profits are down (albeit only slightly).

She's really pissed off the government by hiking the price of new rural connections by a huge amount.

Lower than anticipated revenues from Telecom's investment in the Southern Cross cable might result in the banks calling in a US$139 million debt.

Investments in the company's Australian activities in recent years have required a significant amount of money to be written off.

Rumours abound that Telecom could be about to get a *new* CEO.

So how's Ms Gattung handling all this bad news?

Not very well I'm afraid.

Rather than present a reasoned, rational argument to answer questions and strengthen the case behind her actions and the company's position -- she's behaving like a spoilt kid.

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To paraphrase:

"It's not fair. The government is forcing my company to act as if we're in a competitive marketplace. If you don't stop it I'm going to take my toys and go home."

Yes, Theresa is threatening to scuttle over $100m in new investment if she's forced to play fair.

You've got to have some sympathy for her though.

To date it's been pretty simple for Telecom to make a profit. Although the price of domestic rentals has been limited by the Kiwi Share, the company has been free to charge its competitors whatever it wants when they need to interconnect with the Telecom network.

This has enabled Telecom to leverage its monopoly of the local-loop to ramp up revenues as/when required by simply milking competitors.

Now that the interconnect rate has been slashed to a level more in line with the rest of the world, Telecom's ability to leverage its assets has been significantly reduced.

However, it seems that when the going gets tough, Theresa gets irrational.

Perhaps she's spent too long at the top of a virtual monopoly to realise that Telecom isn't really omnipotent. Threatening the government in this way is not a smart thing to do!

She really ought to remember that although she owns the toys, it's the government who makes the rules about how and when she can play with them. Pissing off the government by hiking rural connection fees and making threats about scaling back on investment could backfire in a very unpleasant way.

It should also be a worry to Telecom shareholders.

If the company is unable to adapt to a truly competitive environment then things do not bode well for the future value of shares or size of dividends.

One only has to look at the fiascos surrounding Telecom's entry into the Australian marketplace, where it doesn't have the advantage of a monopoly, to see that this is not a company well-equipped to cope with a truly competitive environment.

Come on Theresa, go back to charm school for a refresher course and learn to compete on the basis of providing better products at better prices - like the rest of us have to.

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