KEY POINTS:
If his past form is anything to go by, Paul Reynolds will bring a new focus to Telecom - growth.
Since the Government said it would smash Telecom's network monopoly over a year ago, the company has been insisting that it has a new, positive approach, and that the days of digging its heels in and protecting its monopoly at all costs are over.
In Reynolds, chairman Wayne Boyd has chosen a chief executive who looks as if he will deliver on that rhetoric.
As a director of British Telecom since 2001 and the head of BT Wholesale, Reynolds was a key member of the team that set BT's strategy - one that has seen it deliver 19 consecutive quarters of growth and made broadband more widely available in Britain than anywhere else in the world.
Speaking at a telecommunications conference in Rome in April, Reynolds explained that in 2002 BT had a choice - it could either take no risks and just try to extract as much cash as possible from the business or it could use its existing cash flow to try to fund a new strategy.
The company chose the latter and decided to invest in growth.
Five years later, BT is now in the midst of rolling out a next-generation network that will deliver the sort of broadband and communications services that remain only a dream in New Zealand.
By 2010, more than 20 million customers will have access to the new network supplying speeds of up to 24MB/s. BT is developing a host of new products to take advantage of the better technology - internet TV, mobile TV and radio, mobile services which switch to broadband when the user is at home to name a few.
Businesses will also benefit from a range of enabling technologies available on the new network, which BT has dubbed its 21st Century Network.
In New Zealand, meanwhile, Telecom, its competitors, the Government and regulators are all still wrangling over the details of how Telecom's copperwire network will be opened to competition.
Telecom has been advocating structural separation - hiving off the company's network into a separate company - over operational separation, which is splitting the company into retail, wholesale and network divisions, but keeping them all under one roof.
Reynolds wouldn't be drawn on which model he prefers while visiting New Zealand this week.
But David Harrington, the head of regulatory affairs at the Communications Management Association, says the affable Scotsman is well placed to make the most effective deal - if it's not already hammered out before he arrives in September.
"He knows exactly what's involved in operational separation and how it should be done and some of the mistakes that were probably made," Harrington said from the UK.
Then what?
Sorting out local loop unbundling - sharing the copper wire - is the first step. After that, Reynolds will need to turn his attention to a next-generation network for New Zealand.
This might prove to be more difficult than it was in the UK. First, there's New Zealand's mountainous terrain and sparse population that telcos like to remind us about when we complain about inferior and more expensive services.
Second, who's going to pay for it? In the UK, BT was able to fund the construction of the new network by signing long-term agreements with wholesale customers.
But there might not be enough large telecommunications companies here to help underwrite the huge cost involved in building a network.
And Telecom's competitors would need to change their own focus to investment and growth.
Why intervene?
The Reserve Bank's attempt to clarify its currency intervention policy this week failed to answer one crucial question: what will it actually achieve?
In an opinion piece by Deputy Governor Grant Spencer, the bank reiterated that it wasn't trying to defend a particular level in the foreign exchange rate. Rather, intervention can "help to moderate the peaks in the exchange and the length of time we spend at peak levels". But the question remains: given the Reserve Bank's modest aims, what good will intervention do for the economy? Lopping 5c or 10c off the kiwi would give exporters a huge boost and cause a strong pick up in economic growth. But what good would taking, say, half a cent off the kiwi for a few weeks do? The bank hasn't said.
* Christopher Niesche is editor of the Business Herald
