Telecom is reporting net earnings of $614 million, down from $771 million last year.
This continues the trend downwards for Telecom's net earnings, from its peak in 1999 at $822 million.
This year's result does include "abnormal write-offs" from the decision to close down subsidiary AAPT's CDMA cellular network to the tune of $A125 million. Southern Cross Cable dividends of $221 million are included, although CEO Theresa Gattung does warn that the expected levels of return from the cable won't be as high as anticipated or reported.
"We have previously indicated an expectation of dividends from Southern Cross of $US50 million over each of the next three years," however because of the telecommunications market slowdown worldwide, the demand for international bandwidth is "less certain".
"The timing of future dividends may differ to that originally contemplated."
Next year's report will be structured differently to be reflective of Telecom's "development as an Australasian online and communications group". The mobile phone business will be one of four groups and will report on the mobile business in both Australia and New Zealand combined.
Microsoft's investment of $300 million has been included as part of Telecom's "long-term debt".
"Those convertible notes are on our balance sheet - our long-term debt is $3298 million and the $300 million is in there," says public affairs manager Martin Freeth. Microsoft and Telecom signed a deal earlier this year to introduce an online portal, XtraMSN, to New Zealand.