Telecom pins hopes on mobile and broadband

Telecom CEO Paul Reynolds

Telecom says it will balance flagging call revenues with an aggressive grab at market share in the broadband, mobile and IT services markets.

At an investor update yesterday chief executive Paul Reynolds outlined the company's strategy for the next five years which centres on taking number one spot across the three services.

Between 2008 and 2013 Telecom expects to grow revenue between $350 million and $450 million.

Telecom reiterated a 5 to 8 per cent decline in ebitda when it reports its full year results this year. The company said its ebitda decline would slow next financial year and lift by 2013. Ebitda was expected to be in a range of between down 1 per cent and up 2 per cent for the year ending June 30, 2010 and then hit a compound annual growth rate of between 4 and 6 per cent from 2011 to 2013.

Chief financial officer Russ Houlden outlined a cost reduction strategy focused on negotiating favourable terms with suppliers - expected to derive $135 million of benefit - and an internal cost-cutting drive including a reduction in head count, particularly contractors.

Telecom Retail head Alan Gourdie said mobile revenue growth would be tied to data usage. He said Telecom would target high-value customers with its XT Network.

Gourdie expects the company to move 30 per cent of its existing customers to the XT Network by mid-2010.

Gourdie said Telecom aimed to capture 15 per cent of the inbound mobile roaming market next year, estimated to be worth $180 million.