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Telecom's share price fell to a record low yesterday as world markets felt the tremors from Wall St's crash.
The NZX's top stock fell as much as 18c - or 6.5 per cent - before recovering to close at $2.73, down 5c.
Despite market volatility, financial analysts say signs are good Telecom can recover from a nadir that has seen the stock wallowing around the $2.80 mark under its new business plan.
Onerous regulations and the world financial crisis have pushed Telecom below its $3 float price in 1991.
But the stock, which briefly fell from its top spot as New Zealand's biggest public company, can be mended. "Humpty Dumpty can be put together again," said Bruce Sheppard, chairman of the New Zealand Shareholders Association.
Over its 17 years since being floated - 15 of which saw it aggressively maintaining its dominant position - Telecom had delivered investors good returns.
Removing the potential impact from the US financial crisis - American investors hold around 25 per cent of Telecom shares - Sheppard says investors' view of its performance may depend on when they bought the stock.
"If you bought at $9 per share five years ago you are an unhappy shareholder and at $4 per share two years ago you would also be really unhappy.
"But if you bought on the $3 float you would say the share is worth what I paid for them, but I've had two or three capital returns and very good dividends - I'll sit on them."
He said telcos around the world faced issues and flat growth and the industry met competition from the internet but would continue to provide returns for several years yet.
Goldman Sachs JBWere telecommunications analyst Tristan Joll said questions about price remained but he was adjusting to its reshaped business plans and was "cautiously optimistic".
The most important thing was how it developed its share of the mobile market with its new 3G network and cost cutting.
Telecom was still going through a period where it was proving its ability to achieve objectives. But early signs were positive especially with its Wholesale and Chorus divisions.
Forsyth Barr telecommunications analyst Guy Hallwright said Telecom was facing a period of six months to two years when investors would be watching closely how it adjusted to the new regulatory environment.
The delay in regulation meant that as it was adjusting to technology change it was going through a period of accelerated change.
"There is a quite a lot they can do in mobile and broadband and costs to get growth," he said. "As the incumbent they have huge advantages over competitors."
