Telecom NZ CEO and chairman to leave

Telecom New Zealand CEO Paul Reynolds will depart the telco after a planned split into two separate companies.

News of the departure capped months of speculation as to whether or not Reynolds would stay as the head of New Telecom, a smaller role than his current one.

Telecom NZ planned to split into two companies - Chorus (network) and New Telecom (retail) - to be able to take part in the country's Ultra-Fast Broadband fibre-to-the-premises rollout.

Telecom said Reynolds would continue to lead the company through the demerger process and that the search for a replacement would commence next year.

Spokesman Mark Watts said there was no fixed date for Reynolds' departure and as such, no details of any farewell compensation package had been discussed.

However, Watts denied that November 30 - the date when the telco's shareholders vote on structural separation - would be the Reynolds' last day.

The telco also announced today that chairman Wayne Boyd would step down at the November 30 vote, provided shareholders agreed to the demerger of Chorus.

A PhD in Geology, Reynolds came to Telecom New Zealand from BT Wholesale in the UK, replacing Theresa Gattung.

Under Reynolds, Telecom has battled through a tightening regulatory environment in which the telco was first ordered to undergo operational separation by the Government and now, voluntary structural separation.

Reynolds' tenure was marred by widespread failures of the XT mobile network over three months in the summer of 2010, soon after launch.

Telecom's share price dropped 7.7 per cent in morning trading on the New Zealand stock exchange as the demerger plans and Reynolds' departure were announced.