Telecom chairman tired of 'corporate treadmill'

Rod Deane

Outgoing Telecom chairman Rod Deane, who has confirmed he is to retire from the position, says he has had enough of the "corporate treadmill".

Dr Deane, 66, confirmed yesterday he would be standing down from the position within a year.

He was Telecom's chief executive for seven years until 1999 when Theresa Gattung took over, and has chaired its board since. He also plans to step down from the board of the ANZ Bank by June 30.

Since the Government's May 3 announcement of a heavier handed regulatory approach to Telecom, $2.3 billion has been wiped off the company's value.

The recent decline in the value of the company was "severe and regrettable" and was a direct result of measures taken by the Government, Dr Deane told National Radio today.

Those measures were taken despite Telecom exceeding the Government target for total broadband rollout, although he acknowledged that was not the case with the target for wholesale arrangements.

He had intimated to the Telecom board "quite a considerable time period ago" that he wished to retire as chairman, Dr Deane said.

A succession plan had started in 2004 when directors Wayne Boyd and Rob McLeod were brought on to the board as potential successors.

Mr Boyd is chairman of Auckland International Airport and Mr McLeod is a former Ernst & Young chairman.

"I've had enough, in a sense, of the corporate treadmill mainly because my wife and I have been pursuing a range of other activities which we've enjoyed greatly and I think it's time for a change, and this will provide an opportunity for refreshment," Dr Deane said.

"I certainly find some of the regulatory stuff with respect to both the banking world and telecommunications world rather distasteful."

He countered suggestions Telecom had been unprepared for the Government's move to heavier regulation, saying the company set out a range of possible future alternatives in a results briefing several months ago. Those alternatives had included some of the measures adopted by the Government.

Dr Deane acknowledged the purchase of Australian subsidiary AAPT "has not been a good investment".

Telecom bought AAPT for top dollar in 1999 -- only months before the tech wreck of 2000, from which its share price has never recovered.

- AAP

T's carrying value, weakened by fierce competition and high wholesale prices, was written down to just A$628 million ($782m) from A$1.4b in the second quarter.

Dr Deane said AAPT had been turned around and run for several years, until recently, with operating earnings "substantially" greater than capital expenditure and so was generating cash earnings.

The problem was that major Australian telco Telstra had increased wholesale prices, upsetting all the other telcos in the market.

Dr Deane acknowledged AAPT was "bad on the books".

"It has not been a good investment and we've been doing our best to restructure that business," he said.

He did not want to predict when Telecom's share price might recover.

"Share prices take time to recover, but do bear in mind that fundamentally this company is still in very strong shape. We have an A credit rating, one of the strongest in New Zealand, indeed in Australia as well," Dr Deane said.

"Our operating earnings are not growing rapidly but they have been growing slowly on a normalised basis."

In yesterday's statement Dr Deane said he had decided some time ago to reduce his corporate responsibilities and was retiring shortly as a director of the ANZ Banking Group, as chairman of the ANZ National Bank, chairman of Te Papa, the National Museum of New Zealand, and as chairman of the City Gallery Wellington Foundation.

Dr Deane said he was keen to devote more time to a number of other activities which he and his wife Gillian had been pursuing over recent years.

He said he would continue as chairman of Fletcher Building, as a director of Woolworths in Australia, as chairman of the New Zealand Seed Fund, as a board member of the IHC and as a trustee of MOTU, an economic and social research group.

- NZPA