High speed XT network props up Telecom result

Telecom CEO Paul Reynolds is pleased with the XT mobile network's performance. Photo / Glenn Jeffrey

Telecom's latest financial results show a strong start for its high-speed 'XT' mobile network.

In a release this morning, Telecom CEO Paul Reynolds said the company had seen a net increase of 64,000 mobile customers, with XT subscribers numbering an impressive 242,000 in its first full quarter of operation.

It has seen an average per-user increase on mobile revenue of 16 per cent.

"The rest of the year will see the deployment of mobile HSPA+ technology, which offers maximum mobile data speeds of up to 21mb/s. This confirms Telecom's clear leadership in New Zealand and XT's position as one of the fastest mobile networks in the world," Reynolds said.

Overall, Telecom lifted first quarter net earnings 9 percent to $163 million, compared to a year earlier, despite falling revenue.

The company said today the result was due in part to a $43m one-off effect from changes in tax law, while a Southern Cross dividend of $35m was received in the quarter, compared to $39m in the first quarter of the previous year.

Earnings before interest, taxation, depreciation and amortisation (ebitda) of $447m for the three months to the end of September, was 4.1 percent down on a year earlier.

Revenue for the quarter fell 6.5 percent on the equivalent quarter in the previous financial year, to $1.36 billion, while operating expenses fell 7.7 percent to $909m.

Chief executive Paul Reynolds said ebitda remained on track for the company's full year guidance, driven by a combination of revenue growth in mobile thanks to a strong start for the XT mobile network, and continuing progress with costs.

The impact of the economic downturn so far remained modest, he said.

A first quarter dividend of 6c per share is to be paid, unchanged from last year.

Telecom shares closed at $2.48 yesterday, having ranged between $2.88 and $2.19 in the past year.

NZPA / NZ HERALD STAFF