No immediate plans for AAPT sale

No immediate plans for AAPT sale

Summary: Telecom New Zealand has no immediate plans to sell its troubled Australian business following the completion of a strategic review into AAPT's future. "The strategic review we announced in December is now complete, and that process has confirmed continuing to hold and invest in the Australian business," Telecom's chief executive Theresa Gattung said in a statement to the Australian Stock Exchange this morning.

SHARE:
TOPICS: Telcos, AAPT, Optus, SingTel
0
Telecom New Zealand has no immediate plans to sell its troubled Australian business following the completion of a strategic review into AAPT's future.

"The strategic review we announced in December is now complete, and that process has confirmed continuing to hold and invest in the Australian business," Telecom's chief executive Theresa Gattung said in a statement to the Australian Stock Exchange this morning.

Telecom said in December it was examining merger, divestment or retention options for AAPT.

"The review process resulted in a number of proposals from several parties but these proposals did not meet the group's requirement from a value or strategic perspective," Gattung continued.

Telecom is believed to want to retain a foothold in Australia due to the need to maintain services to key trans-Tasman enterprise clients such as the Commonwealth Bank.

"However we believe that further industry consolidation is both a desirable and a realistic prospect in the future," Gattung continued.

Telecom takes AAPT profit hit
Telecom's continuing ownership of AAPT resulted in a hit to the Kiwi carrier's wallet, according to financial results announced today.

While Telecom itself increased its earnings before interest, tax, depreciation and amortisation (EDITDA) by several percentage points for the nine months to March 31 this year, AAPT saw a decline in earnings.

According to Telecom's statement, this was caused by "adverse changes in the [Australian] competitive environment and wholesale arrangements".

"The March quarter results were impacted by a significant tightening of wholesale prices and terms with Telstra, continued downward pressure on retail prices and the deferral of major project expenditure by key enterprise customers of Gen-i Australia," Telecom's statement said.

In addition, Telecom endured a NZ$897 million January write-down of the value of its Australian operations.

Despite this, Gattung said Telecom was continuing to invest in Australia.

"In Australia we are continuing with our investment programme in product, channel and back-office capability as outlined earlier and continue to reposition the business around mass and managed segments," she said.

According to the statement, as at 31 March this year AAPT had 81,000 consumer broadband customers and 93,000 consumer dial-up customers. The company is adding 7,000 broadband customers per month.

In addition, at that same time AAPT had 451,000 fixed-line telephony customers.

AAPT's revenue from business customers declined 5.8 percent to AU$474 million for the nine months to 31 March, with a total of 15,000 business customers, an increase of 44 percent compared with the previous year.

AAPT said the business revenue decline reflected price pressures across most product lines, reduction in business from customers such as Toll, VicOne and Customs Tradegate, as well as a deferral of some projects coming from the Commonwealth Bank.

Topics: Telcos, AAPT, Optus, SingTel

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

0 comments
Log in or register to start the discussion