Telecom pays Microsoft back for investment

Telecom is to repay $150 million Microsoft invested in the telco at the height of the dot com bubble.

In 2001, Microsoft invested $300 million in Telecom as part of the merger of the company's websites.

Xtra and Microsoft's MSN became XtraMSN, one of the country's largest websites.

The investment was made in convertible notes issued by Telecom to Microsoft with a seven-year maturity.

Microsoft still has the rights to buy Telecom shares, however the conversion rate set in 2001 is far higher than Telecom's share price today.

Telecom spokesman Phil King said the move was part of Telecom's debt reduction plan and did not affect the relationship between the two companies.

"Microsoft was involved in this kind of transaction with telcos in the late 1990s but these days there isn't the need to take a stake as part of a strategic relationship."