01 Sep 2011
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Fibre Watch: Changing of the guard

When Paul Reynolds leaves New Zealand next year his legacy as Telecom’s CEO will be that he saved the company from spiralling into irrelevance.

That’s what would have happened if the telco had stuffed up its bid for inclusion in the Government’s Ultra Fast Broadband scheme.

Reynolds also did a good job mopping up the mess that was the disastrous launch of the XT mobile network in 2009.

Those achievements probably warrant the approximately $25 million the affable Scotsman will have pocketed for his efforts by the time he steps down in a few months’ time. 

Winning the UFB work has come with a heavy cost for Telecom – a mandatory carve-up of the company into two separate businesses.

This week saw the Government approve the split and we learned more about how those two businesses – the so-called 'New Telecom' and 'New Chorus' – will look following their de-merger later this year.

One question still remaining is who will replace Reynolds at the helm of New Telecom. There is certainly plenty of speculation

Interestingly, the frontrunners appear to be company insiders, or former executives, from the Telecom era of Reynolds’ predecessor, Theresa Gattung.

Gattung was in the news herself recently, patting herself on the back after finding success as a precious metal speculator.

She told The Australian newspaper how she cashed in $1 million of Telecom shares to buy gold in 2007. Her investment in now worth more than double what she paid.

"I am a conservative investor,” Gattung told the paper. "I look to property, cash and precious metals.”

As market commentator Bryan Gaynor observed, this was a stunning revelation from the woman who used to head up this country’s most significant technology business.

However, it may also go a little tiny way towards explaining – as Gaynor also noted – why Telecom’s value slumped from $16 billion to $9 billion over the period Gattung was CEO.

If Reynolds’ replacement does turn out to be a former Gattung lieutenant, let’s hope it’s someone who sincerely believes there’s gold to be made from selling inspiring and enabling telco services rather than a seat-warmer.

New Telecom deserves a leader capable of leaving a positive legacy as the telco sector steps into an exciting new era.

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