Successor to Deane faces big challenge

By Richard Braddell

Between the lines

Situation Vacant: chief executive for Wellington-based telephone company. Two million customers, great weather and restaurants close to a harbour-front office. Salary by negotiation.

The ad for Telecom's chief executive went out in February, and with three months to go before Dr Roderick Deane vacates the job in September, his successor is still unnamed.

Several candidates have been suggested. The obvious ones from within being the chief financial officer, Jeff White, and the head of services, Theresa Gattung. Outside the company, TVNZ's chief executive, Rick Ellis, and ASB Bank's managing director, Ralph Norris, have been mentioned.

The truth is, nobody knows who will get the job. But if you were looking for a template for Dr Deane's succession, Mr Norris is purpose built, even if he is a banker.

It should be remembered that Dr Deane was once a banker, at the Reserve Bank. Furthermore, Mr Norris is no stranger to technology, having run ASB's information systems before becoming managing director in 1990.

ASB has been no slouch when it comes to technology, most recently leading the way with Internet banking. Arguably, banking and telecommunications are not dissimilar. Both rely heavily on, er, telecommunications, and both are strongly process driven.

And, in many ways, banking can tell telecommunications a thing or two about marketing and administration. Much of the work in developing Telecom's once-celebrated ICMS billing system was based on expertise developed in the banking sector.

Although the search for Dr Deane's successor is global, logic points to a local appointment, if only because that person may not have the elevated salary expectations of foreign candidates.

But whoever takes over at Telecom has challenges ahead, not least because Dr Deane will be looking over his or her shoulder in his new role as chairman.

Moreover, Telecom is at a turning point, taking its recent profit and share price performance as a guide, and that is not just because of its new Australian investment, AAPT.

While its Southern Cross cable project could turn out to be enormously profitable, Telecom has still to deal with much network infrastructure that is well past its prime.

Antiquated exchange switches pose difficulties in rolling out new services, while its analogue cellular network is close to the point where it will no longer compete with value-added services offered by aggressive and digitally based Vodafone.

Whoever takes over may also have a range of management issues to contend with, in part created by Telecom's incessant restructuring.

The succession offers no latitude for fumbling.