New Zealand - Telco Company Profiles - Telecom Corporation New Zealand - Financial Statistics - 2010

Synopsis

In this report we provide coverage of the financial results of Telecom Corporation of New Zealand for 2010 and into 2011, as well as market trends for each operating division. Telecom is New Zealand’s second-biggest listed company and their financial results are dependent on several factors, including regulatory changes announcements from CFH on the preferred UFB companies; and the recent paper by the Ministry of Economic Development analysing Telecom’s announcement of a demerger into separate companies.

The two companies may be based on a structurally separated model of a network and retail. One of the aims of the separation is to be able to participate and gain access to the nationwide ultra-fast broadband network.

Telecom’s overall revenue growth has been negative since 2008/09 and this continues into 2010/11, albeit slowing as the incumbent adjusts to a new and more competitive operating environment after undergoing operational separation. The proposed split of the company into two separate companies (which is still subject to shareholder approval) aims to gain additional revenue streams from the government’s UFB and RBI initiatives that are still to be finalised. BuddeComm believes that the sale of PowerTel’s shareholding of Australian Macquarie Telecom in August 2010 and the consumer division of AAPT, will further lower revenue streams over future financial years. The ongoing costs associated with the 2010 earthquake in Canterbury will continue into the second quarter of the financial year.

This report was replaced in March 2011 and will not be updated further with the addition of a new report with the updated financial information from H1 2010/11. The new report (New Zealand - Telco Company Profiles - Telecom Corporation New Zealand - Financial Statistics - 2011) is available at www.budde.com.au.