KEY POINTS:
Telecom will seek a new chief financial officer with experience in mergers and acquisition so it can take advantage of consolidation in the telecommunications market, says chairman Wayne Boyd.
Chief financial officer Marko Bogoievski announced his resignation yesterday - to take effect next January - after more than
seven years at the phone company and seven weeks after it appointed BT executive Paul Reynolds as its new chief executive.
Boyd said Bogoievski's replacement would have a strategic, rather than purely financial, focus.
"What we're looking for is somebody who can provide the insight into the business operation," said Boyd.
His comments are a sign that Telecom may be planning further acquisitions in New Zealand and Australia.
"I think the person needs to have some strategic insight into the future of telecommunications, and I think we'd probably also want someone with experience in transactions similar to the ones we've undertaken recently," said Boyd.
Telecom has been expanding in Australia over the past year after failing to sell its AAPT phone business.
It sold its Yellow Pages directories business to CCMP Capital Asia and Teachers Private Capital for $2.24 billion in March, and spent A$357 million ($398 million) on network company PowerTel a month later, merging it with AAPT.
At its annual results briefing Telecom said it was transferring a 19.94 per cent stake in Hutchison Telecommunications Australia's 3G subsidiary to 10 per cent of the parent company.
Telecom has the option to increase its stake to a further 19.94 per cent of Hutchison at any time before the end of next year at strike prices of A$250 million to A$300 million.
Under pressure from Government regulation, Telecom has also proposed structurally separating its network business into a separate company.
The Government plan is for Telecom to be separated into three units - retail, wholesale and network - with independent regulatory oversight.
Asked why Bogoievski had decided to leave now, Boyd said it was part of the normal life-cycle of the company.
"Is he prepared to commit to a chief executive looking out for a number of years, and he's made the call that's not something he wants to do," said Boyd.
Bogievski was not available yesterday.
It has been suggested Bogoievski applied for the chief executive role vacated in June by Theresa Gattung, but a Telecom official would not confirm this.
In a research note, Citigroup analyst Kar Yue Yeo said Bogoievski's resignation was not a surprise, but it was a loss for Telecom.
"He is in our view one of the strongest CFOs and strategists we have come across," said Yeo.
But operational separation was a new phase for the company and required a management team with strong operational skills.
Bogoievski joined Telecom in March 2000.
Before that, he was chief financial officer for American company Dispatch Management Services.
He has also been chief financial officer for Ansett New Zealand and finance director, then sales director for New Zealand Wines and Spirits.
Brook Asset Management executive chairman Simon Botherway said Telecom needed to show that its PowerTel strategy was working before considering further expansion.
"I don't think the market would reward them for an aggressive expansion into Australia at this stage."
Boyd said the worldwide hunt for Bogoievski's replacement would extend beyond the telecommunications industry.
The Telecom board has started the search before Reynolds joins the company in September, although he will make the final selection. Telecom shares closed up 12c at $4.28.
