IT Brief New Zealand logo
Technology news for New Zealand's largest enterprises
Story image

Telecom launches new internet TV business following financials

Fri 21 Feb 2014
FYI, this story is more than a year old

Telecom announced today a flat net profit after tax of NZ$167 million for the half year ending 31 December 2013.

Chairman Mark Verbiest says Telecom has been focused for nearly a year now on a clear long-term strategy and is gathering momentum in its execution.

“Over the last year we have moved quickly and decisively, putting several critical foundations in place and making a number of bold market moves," he says.

"We have gained greater traction on our cost competitiveness, increasing the projected free cash flow benefits we believe will be generated by our Turn around Programme, a centrally-driven series of business improvement initiatives.

“Our investments in revamping our mass market brands, Telecom and Skinny, have delivered greater cut-through in key markets.

"This has given us the conviction to move beyond the Telecom name, and better reflect our digital services capability and future focus. Later this year, we intend to change our company name and core customer brands to Spark.”

Earnings for the Group were flat, while underlying lead indicators and revenue performance, especially in mobile, were encouraging. However as expected the ongoing market decline in legacy fixed data and voice, together with the strategic choices made during FY13 to put market share outcomes ahead of short-term financial performance, has continued to impact earnings in New Zealand.

“We expect to see the positive lead indicators from the half year begin to flow more into our financial results from the second half onwards and into the 2015 financial year,” Verbiest adds.

Total operating revenues from continuing operations declined 3.0% to NZ$1,847 million, largely attributable to a 9.2% decline in fixed line revenues. Strong mobile performance saw mobile revenue up 5.8%, partially offsetting the fixed revenue decline.

Operating costs for continuing operations fell 2.1% largely due to ongoing cost reduction initiatives, particularly labour costs. These initiatives were offset by cost growth associated with increased customer numbers and data volumes.

Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) from continuing operations were down 5.8% while net earnings from continuing operations were down 12.5%.

Capital expenditure for continuing operations was up 18.2% to NZ$266 million, reflecting the significant investment in the first half of the year in networks, products and services. Major capital expenditure items included; an ongoing re-engineering programme, upgrade of the core data transport network, and mobile network investment particularly in 4G LTE.

As the previous year’s price-downs in broadband and wholesale are overtaken, the effect is expected to help moderate the rate of decline in legacy fixed revenues in the second half of the financial year.

The Directors have declared a half-year dividend of 8 cents per share, and an intention to pay a minimum of 16 cents per share for the full year. Directors also outlined an aspiration to sustainably increase ordinary dividends over time as the projected improved cash flow performance materialises.

Chief Executive Simon Moutter says that other moves being made in the market are also giving the company additional confidence.

“We’ve continued to make huge investments in New Zealand’s digital networks, launching 4G mobile underpinned by a brand-new core data transport network, building more data center capability and committing to a leadership position in 700MHz spectrum," he adds.

"We have sold the AAPT business in Australia to focus all our efforts on getting it right for New Zealand customers.

“There has also been investment in the digital services so essential to future growth. Notably, we have decided to enter the internet TV market, with a standalone and high-quality internet TV brand, ShowmeTV, to be launched later in the year.”

“We are pleased with our progress to date. We are working hard to become a fast, agile retailer, focused on winning customers. Future oriented. Competitive. Relevant to all New Zealanders. Willing to make bold moves. There’s real momentum building, for our customers and for us.”

Gen-i:

Gen-i has continued to leverage its leadership position in data, mobility and Cloud services to help business and government clients unleash their full potential in a digital world.

During the first half, plans were announced to build new greenfield data centers in Auckland and Wellington and a new data center was opened in Christchurch, further strengthening data hosting capabilities following the acquisition of Revera last year.

Gen-i also won a multi-year contract with the Government’s Network for Learning initiative to build a fast and modern online educational platform for New Zealand schools to maximise the digital learning opportunities created by the ultra-fast broadband (UFB) rollout.

Last year the mass-market Telecom retail brand was revitalised with a new look and the network of Business Hubs for small and medium business customers was relaunched. These moves have shown an immediate impact in increased sales, foot traffic and positive customer feedback.

Digital customer self-service options were also significantly expanded, including the launching of a new Telecom App that has already attracted over 60,000 downloads, and a significant growth in customer take-up of My Telecom and e-billing options.

Telecom has also committed $149 million to four lots (2 x 20MHz) of newly available 700 MHz band radio spectrum to become the biggest player. This will make possible faster and better 4G mobile coverage for less populated parts of New Zealand. This asset has not yet been paid for as the auction process is still under way. The Commerce Commission is deciding on whether or not the purchase of the 4th lot can proceed, which will be followed by an auction round to determine the allocation of positions in the band.

An ongoing programme to re-engineer the IT stack for the business has also progressed well, with the first release of IT improvements on target for the second half of this financial year. This first release, focused on pre-paid mobile, will deliver significant system capability enhancements and improve customer experience, especially across digital channels.

Telecom Digital Ventures, the innovation focused business unit, has continued to develop its portfolio of growth oriented initiatives. This includes a nationwide WiFi network, primarily using revamped phone booths, which now has over 900 hotspots and 300,000 registered users, giving people better connections when out and about and enhancing the value of mobility solutions for business clients.

“Later this year, we will launch ShowmeTV, our new internet TV business," Moutter adds.

"The migration of entertainment to the internet is creating significant disruption to current broadcast TV business models and real opportunities for new online businesses.

"The rapid growth of better broadband via fibre and VDSL means watching TV via streaming over the internet is now a much more viable option for New Zealanders.

"We believe the time is right to enter this market and provide New Zealanders with exciting new choices when it comes to watching video entertainment.”

Outlook

Moutter says the first half results demonstrate a pace and level of change he believes is unparalleled in a large New Zealand business over the last decade.

“We don’t intend to slow down," he adds. "We will continue to address our cost base and strengthen our organisational performance.

"We will focus even harder on becoming more relevant to customers and to modern New Zealand, particularly as we continue our intended transition to Spark.

“We anticipate an improved performance in the second half of this financial year, with broadband revenues beginning to stabilise, mobile growth continuing and our Turnaround Programme delivering tangible free cash flow improvements.”

As a result, adjusted EBITDA from continuing operations for the full year is expected to be in the range of NZ$925 million to $945 million, excluding the sale of AAPT and rebranding costs.

With a lot of the essential network investment for the strategic repositioning of the business already made or committed, capital expenditure from continuing operations for the full year is expected to be NZ$450 to NZ$460m, excluding spectrum, with the capex envelope tightening further in the FY15 to FY17 period.

“There is a lot more hard work to come," Moutter adds. "We’ve got plenty to do to complete our strategic shift and stretch our leadership in data connectivity as well as regain the top spot in the mobile market.

"And all the while, customer needs will continue to evolve as digital life becomes a reality. But we are convinced we are on the right pathway. We’re committed to this course and to playing a major role in New Zealand’s digital future.”

Related stories
Top stories
Story image
Data analytics
Data analytics a struggle for A/NZ healthcare organisations
A study by InterSystems has found that most Australian and New Zealand healthcare organisations struggle to use data analytics to support their business objectives.
Story image
APAC
Automation to take over 63 million jobs in APAC by 2040 - report
Forrester forecasts that working populations in the five largest economies in APAC are more at risk of physical robot automation than in Europe and North America.
Story image
Digital Transformation
Adobe and FC Bayern collaborate on a multi-year partnership
Adobe is embarking on a multi-year partnership with FC Bayern, using its enterprise solutions to carry out the club’s digital transformation.
Story image
Gigabit
Keysight Technologies and Nokia’s public test of 800GE success
Keysight and Nokia have successfully demonstrated the first public 800GE test, validating the readiness of next-generation optics for service providers and network operators.
Story image
SaaS
AvePoint rebrands SaaS learning product to MaivenPoint
"Our mission with MaivenPoint is to make your learning experience limitless and inspire everyone to achieve their aspirations."
Story image
Storage
DCI Data Centers breaks ground on AKL02 center
DCI Data Centers has commenced construction on Auckland's largest data center.
Story image
Inde
Exclusive: Inde provides innovative solutions across the tech sector
Inde likes to call its approach the 'power of the collective', which essentially means that if a client approaches the company with a problem, they'll get the team's collective insight to help drive the best outcome.
Story image
Enterprise
Fortinet reports second quarter 2022 financial results
“We delivered strong revenue and billings growth in the second quarter driven by an increase in the number of transactions larger than one million dollars."
Story image
Neat
Workplace design a crucial factor for better employee experience - report
The key to a successful workplace could be its design, according to research from Ecosystm and Neat.
Story image
Open source
Flashpoint acquires Echosec Systems, elevates OSINT capabilities
Flashpoint has acquired Echosec Systems, a provider of open-source intelligence and publicly available information.
Story image
Customer
OfficeMax NZ sees significant growth through Seismic partnership
OfficeMax New Zealand has announced it has seen a significant increase in customer and sales confidence as a result of Seismic’s digital enablement software.
Story image
Gartner
Veeam named Leader in enterprise backup and recovery
"We believe our innovation and ability to execute validates our solid standing as the #1 trusted provider of modern data protection."
AWS Marketplace
See how managed security services (MSS) have evolved to Managed Detection and Response (MDR) and Extended Detection and Response (XDR). Learn how these new holistic solutions can simplify security management and improve your threat detection and response.
Link image
Story image
Data
Talend announces support for Amazon Redshift Serverless
Talend has announced its support for Amazon Redshift Serverless, with the company saying the integration reinforces its commitment and leadership in supporting businesses.
Story image
Rubrik
Gartner names Rubrik Leader in 2022 Magic Quadrant
Rubrik has been positioned by Gartner as a Leader in the 2022 Magic Quadrant for Enterprise Backup and Recovery Software Solutions.
Story image
Data Protection
CyberRes partners with Google Cloud in lead up to BigQuery release
CyberRes, a Micro Focus line of business, has announced a partnership with Google Cloud to support the upcoming release of BigQuery remote functions.
Story image
Mergers and Acquisitions
Netskope acquires Infiot, delivers integrated SASE platform
Converged SASE platform provides AI-driven zero trust security and simplified, optimised connectivity to any network location or device, including IoT.
Story image
Financials
Google NZ numbers show strong comprehensive profit increase
The latest financial report from Google New Zealand Limited has revealed an increase in total comprehensive profit of over $NZD 7 million.
Story image
10 Minute IT Jams
Video: 10 Minute IT Jams - An update from Heidrick & Struggles
Graham Kittle joins us today to discuss how the company is helping organisations bring about change within their business.
Story image
Enterprise Resource Planning / ERP
Why the right ERP (and partner) is crucial to an innovative and successful business
Enterprise Resource Planning (ERP) is a foundational step to ensuring a robust business model; here's why choosing the right one could be vital to ensuring long-term success and innovative results.
Story image
Sustainability
Visa launches Eco Benefits solutions in Australia and NZ
Eco Benefits is a suite of sustainability-focused solutions that will help Visa cardholders better understand the environmental impact of their payments.
Story image
Healthcare
Why the Metaverse could be the key to enhancing the healthcare sector
The experts at Accenture understand that the programmable world is about building the next version of the physical world in healthcare, understanding complex layers in order to fully utilise technology to its maximum effect.
Story image
Apple
2degrees unveils eSIM functionality for selected devices
2degrees has enabled eSIM functionality to work with a variety of Apple, Samsung and Oppo devices, including a range of iPads.
Story image
10 Minute IT Jams
Video: 10 Minute IT Jams - An update from Talend
Stu Garrow joins us today to discuss the company’s key solutions, and how they can help organisations thrive in the data management space.
Story image
Phishing
Norton research finds NZ threat landscape diversifying on social media
Norton's quarterly report has highlighted the seriousness of the threat landscape in New Zealand.
Story image
Hybrid Cloud
The essential guide to digital transformation by SolarWinds
Digital transformation is a buzzword thrown around all the time by companies, but what does it actually mean and why is it important? SolarWinds breaks it down.
Story image
Pure Storage
Pure Storage named leader in GigaOm report for Kubernetes storage
Pure Storage named the leader for the third consecutive year by GigaOm Radar Report for enterprise Kubernetes storage.
Story image
Indusface
Why enhancing bot protection for web and API endpoints matters
The trouble with bots is that they aren’t all bad. Unfortunately, this can make it challenging to detect malicious bots that find their way into your system and threaten your business.
Story image
SaaS
Claroty launches new cloud-based industrial cybersecurity platform
The company says Claroty xDome is the industry's first solution to deliver the ease and scalability of SaaS without compromising on visibility, protection, and monitoring controls.
Story image
Tech job moves
Tech job moves - Cohesity, Equinix, IDC, Proofpoint & Xero
We round up all job appointments from July 29 - August 5, 2022, in one place to keep you updated with the latest from across the tech industries.
Story image
Firewall
Fortinet unveils compact firewall for hyperscale data centres, 5G networks
"Fortinet’s dedication to pushing the boundaries of what is possible in security performance has yielded the most powerful compact firewall yet."
Story image
LG Electronics
LG Electronics’ revenue in NZ grows by 57% in FY 2021
The New Zealand branch of LG Electronics Australia's total revenue shot up by nearly NZD $45 million reaching a total of $123.7 million for FY 2021.
Story image
Compliance
Why security needs to shape your journey to the cloud
It's estimated that 80% of workloads could be in the cloud in the next few years. How can you make all that data secure?
Story image
Document Management
TrustRadius gives M-Files two document management awards
TrustRadius has recognised M-Files with both a 2022 Best Feature Set and a 2022 Best Relationship award in document management.
Story image
Payroll
Exclusive: UKG brings a people focused approach to workforce management
Managing an effective and efficient workforce is the crux of any business operation, and in today's climate, it's more than just work employers need to be aware of.
Story image
Gaming
Chorus announces Hyperfibre sponsorship deal with NZ Esports
Chorus has put its support behind New Zealand's Esports community with a newly announced three-year Hyperfibre sponsorship deal with NZ Esports.
Story image
Ransomware
Ivanti and SentinelOne partner on patch management solution
Ivanti and SentinelOne will integrate their technologies Ivanti Neurons for Patch Management and SentinelOne's Singularity XDR platform.
Story image
Financial results
Facebook NZ financial report reveals notable revenue increase
Revenue from contracts with customers increased by $NZD 1,089,292 compared to 2020's figures.
Story image
Tablets & laptops
Chromebook and tablet shipments see another rapid decline for the year
According to research from Canalys PC Analysis, Chromebook and tablet shipments have fallen for the fourth quarter in a row for Q2 of 2022.
AWS Marketplace
Learn how security orchestration, automation, and response (SOAR) enhances your security strategy.
Link image
W.Media
Register now for the Sydney Cloud & Datacenter Convention 2022 and learn about topics ranging from digital transformation to data center sustainability.
Link image
Story image
Data Protection
Video: 10 Minute IT Jams - An update from SearchInform
Alexey Pinchuk joins us today to discuss the role the company plays in helping organisations manage risk and provide better security outcomes.