New Zealand-based telecommunications group Telecom New Zealand (TEL) reported a 12.6% decrease in net earnings for the six months ended December 2007 due to a decline in calling revenue and increased competition.
The company said adjusted net earnings were $NZ397 million compared to the prior corresponding period for the six months ended December 2006 of $NZ408 million.
"The decline in calling revenue of $NZ87 million for the six months ended 31 December 2007 and $NZ36 million for Q2 2007-08, when compared to prior corresponding periods, was a result of increased competitive pressure in the NZ market and decreased calls to mobile networks in the Australian market," the company said.
Mobile revenue also decreased due to a decline in handset revenue, reduced calling volumes and the impact of new pricing offers.
On the other hand, broadband and internet revenue increased by $26 million on the prior period as a result of continued connection growth.
IT services revenue increased, whilst operating expenses increased as well.
On the Australian operations front, work is well advanced on the integration of the AAPT and PowerTel.
However, migration of the customer base onto the new mass-market service platform has progressed, with significant pressure on the customer call centres.
Gen-i Australia is ‘under extreme margin pressure' due to scope and price reduction in contracts with major customers. A strategic review has been initiated, the company said.
Shares in TEL closed 12 down at $3.48.
