Telecom has reported a 9 percent rise in first quarter profits to $163 million, thanks to a $43m gain from changes in tax law.
Revenues fell 6.5 per cent to $1.36 billion.
The company said earnings before interest, tax, depreciation and amortisation (Ebitda) were in line with guidance.
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Telecom had 242,000 customers on its XT mobile network at the end of September, adding 64,000 mobile customers during the quarter in total. Fixed broadband market growth remained "stable".
Chief executive Paul Reynolds said details of the Government's $1.5 billion ultrafast broadband investment initiative made it difficult for the company to participate in the scheme, but it supported the government's vision and remained "flexible and open-minded".
Telecom made no change to its Ebitda guidance for the full year, forecasting it would fall 1 percent at worst and rise 2 percent at best, but said this was still subject to potential economic risks.
The Commerce Commission has meanwhileannounced it will prosecute Telecom over the "loyalty" offers it provided to wholesale customers, saying they are likely to have breached the company’s separation undertakings and have the potential to "seriously harm competition". Telecom faces a possible fine of $10m on each of the charges — more if it is decided it derived a greater illegal benefit.