Telecom New Zealand revises revenues

Telco takes hit from regulatory and market conditions

Telecom New Zealand has revised its financial guidance for the financial year 2011 through 2013 to reflect the impact of several regulatory and market factors.

The telco has revised its FY11 results down from a top EBITDA of $NZ1.855 billion down to a top of $NZ1.780 billion.

It has revised its EBITDA for FY12 from a top of $NZ110 million to $N80 million, and FY13 has been revised down from an EBITDA top of $NZ115 to a top of $80 million.

The changes reflect a softening revenue outlook as a result of lower mobile revenue growth, price pressure in voice and data markets and the flow-on impacts of the economic downturn, Telecom said in a statement to the Australian Stock Exchange (ASX).

The changes also reflect Telecom’s failed appeal on the NZ Commerce Commission’s 2004/05 and 2005/06 Telecommunications Service Obligation (TSO) determinations.

In Early February Telecom Group General Counsel, Tristan Gilbertson, said Telecom’s original decision to challenge the determinations was based on the company’s strong conviction that the rates of return set by the Commission in the decisions were below what any reasonable investor could accept for large-scale infrastructure investments.

In the ASX statement Telecom chief executive officer, Paul Reynolds, said the company was now “highly focused” on dealing with New Zealand impending Ultra Fast Broadband network.

The telco also recently announced that it was about to lose its Telecom Wholesale and International chief executive officer, Matt Crockett, who has announced that he would leave the company in June.

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