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Hodson to stamp mark on new Spark strategy early next year

Thursday 22nd August 2019

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Spark New Zealand's new chief executive Jolie Hodson will outline where she wants to take the country's biggest telecommunications company early next year. 

The company is in the final year of a three-year programme to boost its operating earnings margin to at least 31 percent by extracting costs from the business through simplifying services, boosting automation and digitisation, and making better use of its suite of brands. It also introduced a flatter, more autonomous decision-making structure, known as Agile. 

"We're also now in the process of developing the next three-year strategy beyond FY20 and I anticipate sharing this with you early in the new calendar year," Hodson told analysts yesterday. 

She wouldn't be drawn on what her senior leadership team and board are considering, but said Spark will hold an investor day soon after the first-half result in February. That will provide an opportunity to dig into the new strategy, she said. 

Hodson took over the reins in July, replacing Simon Moutter who rebranded the old vertically integrated Telecom Corp as the digital and mobile-focused service firm, Spark. He then pursued a goal of becoming the lowest-cost operator. 

Embracing wireless technology is a key plank to that strategy and underpinned Spark's desire to build a 5G mobile network. Wireless broadband means Spark avoids paying wholesale access fees to a network operator such as Chorus, while 5G would let the telco carrier offer greater capacity at a lower cost than on existing 4G and 4.5G networks. 

The company acknowledged the new ownership of Vodafone New Zealand in its annual report, saying its rival "will now have greater flexibility to adjust its strategy and investments to suit the unique features of a New Zealand market."

However, Hodson told analysts that Vodafone was still several years behind Spark in pursuing 5G and wireless strategies

Spark has already adopted a new sustainability strategy after spending the past year reviewing its non-financial performance and reporting, and Hodson said the firm wants to make a "positive contribution to New Zealand." 

The four pillars of the sustainability strategy are: fairness and inclusion, environmental protection, a prosperous New Zealand, and trust and transparency. 

The telco's board has had a particular focus on improving gender inclusion and diversity, led by chair Justine Smyth. In the 2019 financial year, women made up 36 percent of Spark's workforce, 38 percent of new hires, and 42 percent of those who left the telco. 

The gender pay gap varied across Spark's different types of work, but across its 5,377 staff, women were paid 18 percent less than men. 

"A major contributor to this differential is the make-up of New Zealand’s technology sector having a significantly higher proportion of males compared to females," its annual report said.

"Spark has sought to reduce this ratio over time with initiatives such as Women in Technology scholarships and partnering with external technology educators, designed to proactively build a New Zealand-wide pipeline of female technology qualified employees." 

Statistics New Zealand yesterday said the national gender pay gap was 9.3 percent in the June quarter, the third smallest since the agency started collecting the data in 1998. 


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