Telecom earnings up, mobile users up

Telecom’s has announced first quarter earnings of $447 million, a 4.1% decline on the equivalent quarter last year, which is in line with guidance. Group net earnings increased 9% to $163m when compared to the equivalent quarter in the prior financial year. This was due in part to a $43m one-off effect from changes in tax law. A Southern Cross dividend of $35m was received in the quarter, compared to $39m in Q1 FY0.Revenue for the quarter fell 6.5% on the equivalent quarter in the previous financial year, to $1,356m, while operating expenses fell faster, to $909m, a 7.7% decrease on the equivalent quarter.In a statement chief executive Paul Reynolds says EBITA (earnings before interest, taxation, depreciation and amortisation) has remained on track citing a growth in mobile and a cost-cutting programme.“Telecom saw a net increase of 64,000 mobile customers during Q1, with 242,000 customers on XT at the end of its first full quarter of operation. We are delighted that the great customer experience offered by XT encourages customers to use their mobile services more, with an increase of 16% in average revenue per user on like for like customers.”Reynolds says future EBITA guidance is subject to potential regulatory risks arising from the proposed Ultra Fast Broadband, Rural Broadband and TSO Obligations.Meanwhile the Commerce Commission has announced this morning it is issuing proceedings against the company , alledging that the loyalty offers by Telecom Wholesale in December 2008 - July 2009 were in breach of the Telecom Separation Undertakings. More to come.