CityLink revenue contributes to TeamTalk result

UFB prospects noted in firm's half-year report

TeamTalk, owner of Wellington's CityLink fibre provider, has reported a net proft of $2.3 million for the six months to December 31, a 21 percent increase on the 2009 second half-year result. Revenue from CityLink contributed significantly to the result, providing $6.8 million of the group's $15.6 million revenue for the half-year, up from $4 million the previous July-December period. The firm's radio division provided the rest of the revenue. TeamTalk acquired a majority stake in CityLink in 2006, and later upped its ownership to 100 per cent. The report accompanying the result notes: "The regulatory haze that has befuddled the telecommunications industry for the last two years is slowly clearing. The overall shape of the government’s policies in rural telecommunications, urban broadband and the cellular market is starting to emerge. Broadly speaking these policies will increase the penetration of generic broadband products but leave the markets for TeamTalk’s specialised products largely unaffected.

"As a niche player we expect to find additional new opportunities in the market gaps that these policies will inevitably create. We expect that these opportunities will become increasingly apparent over the next 12 months."

On the Ultra-Fast Broadband initiative, the report notes: "TeamTalk is one of only two shortlisted bidders for the Wellington portion of the Government’s Ultra-Fast Broadband (UFB) tender but the success of our focused niche strategy has allowed us to relax our activities in this area. This has proven to be somewhat fortuitous as the whole UFB process has become something of a moving feast and the economics of the plan remain very challenging. Should either of these factors change we remain well positioned to progress our response." The report was released the same day as the government announced that Vector is in the running for the Auckland UFB rollout, in addition to Telecom.

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