KEY POINTS:
Spinning off Telecom's core network for sale is firmly off the agenda, says the company's new chief executive, Paul Reynolds.
Speaking after Telecom's annual meeting in Dunedin yesterday, Reynolds said there were no plans to sell the network - valued at up to $4 billion.
"We are fundamentally
a communications business and it's founded on our running a network. I have no plans to change that," said Reynolds.
The company had originally tabled a plan for structural separation - splitting its network business off into a separate entity - in response to Government plans to operationally separate it into three divisions.
But yesterday Reynolds was upbeat about the Government decision.
"I think the outcome in David Cunliffe's determination was good," said Reynolds. "It's good for customers, it's good for New Zealanders and it's good for Telecom and that's because for customers it paves the way for choice ... It's good for New Zealanders because I think it sets a clear framework for firms to invest - that's Telecom and other service providers in the market - and it's good for Telecom because it enables us to have real certainty about our market, to focus and to get on with growing our business, whether that be in the retail, the wholesale or the access space."
In his first public appearance since taking up the chief executive job a week ago, Reynolds said he was not able to comment on specific challenges and opportunities facing the company.
"For me this phase is about listening - listening to shareholders, customers and Telecom people's views about the operation so I can get my plans ready and arranged in full view of the coming weeks and months," he said.
Chairman Wayne Boyd told shareholders the company was in a new era, symbolised by the new regulatory landscape and the arrival of Reynolds as chief executive, which he described as "a watershed for Telecom".
"I'm confident we are on a path that is going to deliver for shareholders and customers," he said.
Boyd reaffirmed Telecom's financial outlook, saying normalised net profits after tax are forecast to be between $680 million and $720 million.
Boyd said that although revenues were declining in traditional areas such as calling, expected to be between 5 per cent to 8 per cent this financial year, these were being offset by growth from areas like the company's IT business Gen-i.
Reynolds said the increased competition is part of the "world of change" that is business.
"This company has opportunities for growth in innovation in products and services.
"Broadband brings a wealth of opportunity and possibility that I don't think we've fully exploited yet. There's also some opportunities to grow in some new markets and we see some real strengthening in our capability in Australia, for example."
Reynolds said new appointments would be made, including a replacement for chief financial officer Marko Bogoievski.
The new environment was going to be time-consuming and would result in changes right across the company.