Telecom NZ happy to see AAPT go

Summary:Telecom NZ has admitted that it will be glad to see the back of AAPT's embattled consumer business, with chief executive officer (CEO) Dr Paul Reynolds saying that the consumer business wasn't its strong suit.

Telecom NZ has admitted that it will be glad to see the back of AAPT's embattled consumer business, with chief executive officer (CEO) Dr Paul Reynolds saying that the consumer business wasn't its strong suit.

New Zealand map

Telecom NZ said its strengths in the Australian market lie in the AAPT wholesale arm. (New Zealand map image by Marcus Holland-Moritz, CC BY-SA 2.0)

In a results presentation this morning, CEO Dr Paul Reynolds said that Telecom NZ's real strength in the Australian market was its wholesale arm.

"We're very strong in wholesale and business [units], consumer's the one that we're less strong at," Reynolds said.

Reynolds added that he was satisfied with the deal that would see Telecom NZ offload its weaker consumer arm and retain the successful wholesale and business arms and the market sector they hold.

iiNet offered $60 million for the consumer arm of AAPT in July, which saw the internet service provider secure its number three spot in the Australian broadband market.

Telecom NZ also offloaded its stake in both Macquarie Telecom and iiNet at the time of the AAPT consumer deal, bringing full asset sales revenue to approximately $140 million.

However, despite the successful sales, Telecom NZ posted a decline in annual revenue and a black spot on its bottom line.

Telecom today reported a 4.5 per cent fall in its bottom line full year net profit to NZ$380 million, with revenue down 6.5 per cent to NZ$5.27 billion.

Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for the year to June was NZ$1.76 billion, and for the fourth quarter rose 5.4 per cent to NZ$428 million.

"Telecom has halted the significant earnings decline of the previous two years and achieved notable improvements in the trajectory of each of its businesses," Reynolds said.

The fall in revenue mainly reflected continued competitive and price pressure in the legacy fixed line businesses, Telecom NZ said.

New Zealand's fixed broadband market growth was stable around 10 per cent in the latest quarter, with Telecom NZ's market share steady at 56 per cent.

Small rises were recorded in mobile and interconnection revenue. Falls in revenue were more than offset by a cut in operating expenses, which fell 11.4 per cent to NZ$3.51 billion for the full year, Telecom NZ said.

Topics: Telcos, AAPT

About

A fresh recruit onto the tech journalism battlefield, Luke Hopewell is eager to see some action. After a tour of duty in the belly of the Telstra beast, he is keen to report big stories on the enterprise beat. Drawing on past experience in radio, print and magazine, he plans to ask all the tough questions you want answered.

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