TelstraClear finally posts a profit

By PAUL BRISLEN

Three years after launching, telecommunications company TelstraClear has finally reported a profit in New Zealand.

The net profit of $2.7 million - on revenue of $692 million - reverses last year's net loss of $157 million.

Chief executive Rosemary Howard said the result was "extremely satisfying" and a year ahead of her expectations.

"The revenue's pretty much where we planned it to be but the synergy benefits of the merger have been a bit stronger and a bit earlier than we hoped."

Telstra bought Clear Communications from BT in December 2001 and created the country's second-largest telco but struggled to become profitable. Howard said efficiency gains in the merged company had helped to fix that. TelstraClear lobbied aggressively but last year failed to secure "unbundling" - or access to Telecom's network.

However, the company has won the right to resell residential services over Telecom's network. Howard said that would drive revenue in the financial year ahead.

She said TelstraClear's revenue gains came largely from retail growth of about 9 per cent, while wholesale sales had been sluggish.

"Wholesale revenue has also been impacted by a one-off international accounting rate adjustment on the down side," Howard said.

She also saw a great deal of potential in the transtasman marketplace.

"The key thing for us is Telstra seeing New Zealand not as an international investment but as part of a transtasman market place."

Howard said the transtasman market was growing at a faster rate than either the Australian or New Zealand markets.

"Revenue growth is about twice the rate of either New Zealand or Australia as more companies straddle the Ditch."

Uptake of services on TelstraClear's own network, based primarily in Wellington, has increased with an estimated 10 per cent penetration rate for broadband services on the network.

TelstraClear claims to have 400,000 customers and 12 per cent market share by revenue.