KEY POINTS:
Marko Bogoievski wants to become the next chief executive of Telecom, but with one important proviso - that the company is able to grow aggressively in the new regulatory environment.
With Theresa Gattung's resignation after seven years at the helm yesterday, Bogoievski has signalled his interest in moving
from his chief financial officer role to the top job.
"I think the nature of the role is highly dependent on what unfolds in the next few months," said Bogoievski.
"We are going to have to be a bit flexible and in some scenarios that implies a certain type of chief executive where you are looking for different attributes. I'm not trying to be coy, it is the way I feel," he said.
"You would like to think it is a business that is able to make commercial judgments and calls, and grow vigorously. Under scenarios where we still look like that I am quite interested in maintaining my current role and other roles."
Bogoievski, 44, was referring to the difficulty Telecom faces in growing under the tougher regulations imposed by the Government last May. He said he was waiting to see how the regulation panned out before throwing his hat into the ring.
It was the Government's decision last May to open Telecom's network to competitors and Gattung's apparent inability to read the Government's mood that cost her her job.
Her resignation came as no surprise to many. The surprise was how long she held on.
Bogoievski may not have too long to make up his mind. At Telecom's second-quarter profit announcement yesterday, chairman Wayne Boyd said the company had begun a search for a new chief executive internally and internationally. He was planning to speak to internal candidates yesterday.
Boyd said he would update the market on progress in three months. Gattung will remain in her job until June.
Several possible candidates have been mentioned to take her job. One is the chief operating officer of Telecom's consumer business, Kevin Kenrick.
Tim Miles, the former head of Vodafone UK who has recently returned to New Zealand for family reasons, is also said to be a contender. The chief executive of media company Fairfax Holdings, former All Black David Kirk, has also been suggested.
Simon Botherway, of Brook Asset Management, said Telecom might have difficulty attracting strong international candidates because of concerns that a tougher regulatory regime would hamper Telecom's growth. "They might struggle to attract an external international candidate," he said. "If they are in an organisation so severely hobbled that they can't make their mark or grow the business, then that's not something that's going to be attractive to them."
While Bogoievski appears to share similar concerns, he remains the favourite.
He is well respected by the financial markets - an important attribute considering the fall from grace for Telecom on the stock market - and is heading Telecom's sale of Yellow Pages and the A$357 million bid for PowerTel in Australia.
Botherway describes him as "a world class CFO".
He has an MBA from Harvard Business School and a deep knowledge of the financial workings of Telecom, having been chief financial officer for seven years. He said he had picked up his technical knowledge about the phone industry since joining Telecom.
He is the opposite of Gattung in some respects: cool, moderate and bordering on aloof. But he is also part of the old Telecom - the company that believed it was untouchable.
Observers have questioned his ability to transform the company while he maintains ties to the old way of doing business.
Boyd said yesterday the key attribute for the new chief would be the ability to manage "truly transformational change for this company". He told reporters and analysts not to underestimate "the complexity and scale of the transformation that this company is undertaking". He added: "The Government has introduced a regulatory environment that the company has not confronted before and it is that change that reaches through all parts of the organisation."
He is also aware that Telecom needs to improve its image. "People need to breathe in. We do need to get some runs on the board so you can talk about us positively at barbecues," he said.
He hinted that he was interested in internal candidates and wanted someone with a strong technical background. Anyone taking on the role would be based in Auckland.
One analyst said the chief executive would have to manage a company that was was struggling to meet basic broadband requirements in New Zealand and also find new revenue for the business.
Telecommunications User Association of New Zealand chief executive Ernie Newman said it wanted someone who had a vision for New Zealand and Telecom and who fully understood the desire of New Zealanders to have a more modern telecommunications system.
"They must have an empathy and feeling for the increasingly dominant role telecommunications are taking in our lives and business affairs. We want someone who is going to look outside the company and not just inside."
IDC telecommunications analyst Darian Bird said Telecom was entering uncharted waters, and needed a leader capable of managing massive change in an uncertain environment. "The new chief executive will need to balance minimising the loss of internet market share after local loop unbundling, and finding new revenue streams.
"The proven ability to manage a re-organisation like the one Telecom faces will certainly prove beneficial for any candidate," said Bird.
Some analysts said Bogoievski's ability to manage transformation in the company was already evident in the way he was attempting to expand the business in Australia, but the true test would be how he managed the threat to the company's returns in the New Zealand market.
The new chief would have to be politically savvy and able to build bridges with a Government which had staked its election chances on successfully forcing Telecom to open up to rivals and making the telco market more competitive.
It would take several months to see what the impact of the tougher regulatory regime - which forces Telecom to share its network with other phone and internet providers - would have on Telecom's bottom line. Communications Minister David Cunliffe is aiming to split the company into separate operating units by the middle of the year.
The job would be a huge challenge. The person would step into a company broadly distrusted by the public, and under the thumb of the Government.
The new CEO would also have to keep growing the business in a harsh regulatory environment, while keeping ahead of new technology, and competitors.
Marko Bogoievski
* Graduated from Victoria University with a Bachelor of Commerce and Administration.
* Masters of Business Administration from Harvard Graduate School of Business.
* Held a number of senior financial, operational and sales roles in Lion Nathan, Ansett, Elders Financial Group and Pricewaterhouse-Coopers.
* Joined Telecom as chief financial officer in 2000.
* Was paid $1.5 million in 2005, according to Bloomberg.
* Keen golfer and father of two boys.
