KEY POINTS:
Telecom's share price fell for the fourth successive day yesterday after the company's recovery plan revealed there would be another two years of pain before gains in 2011.
At the end of trading on Monday, Telecom shares were valued at $4.06. But the value slid through the week and dropped 8c on Thursday when chief executive Paul Reynolds laid out his road map to recovery.
Yesterday - the day after the investor briefing - the share price fell 14c, closing at $3.58c. This takes losses over the past four days to 48c or 11 per cent.
After two years of upheavals for the sharemarket, analysts were broadly positive about Reynolds' recovery plan but said key questions had not been answered.
ABN Amro analysts Ian Martin and Geoff Zane welcomed the company staking out a position. But the fall before the rise in profits - "the J curve" - was deeper than expected.
Tyndall Asset Management domestic equity manager James Lindsay said market reaction might have been because investors were surprised Telecom announced the absence of imputations - tax credits that increase the yield of shares.
Combined with the dropping of dividends to 24c and warnings that operating profits would be down in 2009 and 2010, some had been surprised.
"Investors don't like that sort of surprise, especially in the current environment for equities," Lindsay said.
Deutsche Bank reduced its target price for the company from $4.25 a share to $3.90.
It welcomed the launch of a new mobile network and the company's enthusiasm for monitoring customer satisfaction.
Deutsche Bank was concerned the company played down developing a media arm, saying that was necessary to meet profit targets.
ABN Amro said the view of the company after the briefing was better than expected.
It was more confident about Telecom's change of management but had several concerns including the lack of detail on the mobile strategy and the ability to manage the company under the new plan.
Telecom mobile has lost market share while awaiting the launch of the new WCDMA network in November.
Brook Asset Management's Paul Glass - who says he does not manage funds that invest in Telecom and does not intend to - said the briefing was a wakeup call for analysts about problems facing the company.
"There is no doubt that Telecom is a very structurally challenged business. I think it is an enormous leap of faith in seeing the decline ending and returning to growth."
