UK Telecom exec may replace NZ's Gattung

Telecom NZ's well-regarded finance chief Marko Bogoievski, who started the process as favourite, was understood not to have made a shortlist of two candidates now being considered by the company's board.

Mr Reynolds, who was also considered for the top Telstra job in 2005, was believed to have gained favour with the board because of his success in creating a separate networks division at the British telecommunications company.

This is the same challenge facing Telecom NZ, after regulatory changes were announced by the Government last year that would see internal separation of the company into networks, wholesale and retail divisions.

Mr Bogoievski was understood to have always placed conditions on whether he would accept the top job.

Telecom NZ chairman Wayne Boyd told The Australian that while he had been hoping to release the news sooner, the board would finalise the appointment by the end of this month.

The continuing search for a replacement for Ms Gattung, who stands down at the end of June, comes as the chief executive of Telecom's AAPT subsidiary moves to slash costs.

Paul Broad has cut a number of senior staff, including long-time regulatory chief David Havyatt, as he tries to chop 10 per cent off the AAPT's operating costs.