Telstra recalls its NZ chief

Rosemary Howard

Telstra has recalled its New Zealand chief executive in a move many believe is driven by the Australian Government's plan to sell its A$33 billion ($35.5 billion) stake in the telecommunications giant.

TelstraClear's Rosemary Howard is returning to Australia and former Wrightson boss Allan Freeth has been appointed her successor.

Howard has been appointed Telstra's managing director of voice and convergence.

Industry analyst Paul Budde said the move might signal a change in strategy by the company.

"It's sad, in my opinion, for New Zealand, because you're really losing a champion of competition," Budde said. "She didn't shy away from the limelight, from being controversial and from taking up the fight on behalf of competition."

Budde said the change might reflect a desire by Telstra to pull back from regulatory confrontation and stabilise the business environment before privatisation.

"It [privatisation] is bigger than Ben Hur and everything else basically has to take a major step backwards."

Budde now expects TelstraClear to refocus on New Zealand's corporate and wholesale business.

The Australian Government's scoping study to pave the way for the sale of its 51.8 per cent share in Telstra is due to be completed by the middle of this year.

Any sale is likely late next year. It will be the world's biggest share sale if the Government decides to sell its stake in one tranche.

The Australian Government yesterday named the communications adviser for the study, and legal and financial advisers are due to be announced at the end of this month.

Howard has faced criticism in New Zealand for growing the company slower than some expected and pinning too much on the since-rejected calls for the Commerce Commission to open up Telecom's network to competition.

She said her move to Australia had been under discussion "for a little while".

"I'm an Aussie and I've got to go back sometime, and now is the right time for me, for TelstraClear and the shareholder."

Among her achievements, she listed establishing a business and residential customer base, increasing market competition and passing the profitability threshold she said was "vital to future success".

Telstra-Clear's half-year results to last December showed a $1 million profit compared with a $5 million loss in the same period last year.

Howard said her new role, in which she will have oversight of a portfolio of products with revenue of more than A$8 billion, was a good step in her career.

"It's the fantastic transition that we're going through, from the traditional legacy way of delivering voice calls ... into the internet protocol world, where voice becomes a bit of data."

Freeth has been a member of the TelstraClear advisory committee for the past year and will take up his post as chief executive on April 16.

TelstraClear chairman David Thodey said the local appointment signalled faith in the company's maturity.

"In the past 3 1/2 years TelstraClear, under Rosemary's leadership, has proved itself a successful contender in the New Zealand and transtasman markets," he said.