Analyst pans indifferent Telecom result

Australian telecommunications analyst Paul Budde says Telecom's half-yearly financial report is indicative of the telco 'taking the wrong road'.

Australian telecommunications analyst Paul Budde says Telecom’s half-yearly financial report is indicative of the telco “taking the wrong road”.

Telecom reported profit of $300 million in the six months to the end of last December, on revenue, including that contributed by Australian property AAPT, of $2.673 billion. That compares with $406 million profit on revenue of $1.88 billion for the same period the year before.

“Revenue growth of 2.3% in New Zealand when we’re in a growth market where 10% is seen as slow is just not acceptable,” Budde says. The years where Telecom paid out huge dividends instead of reinvesting in its network are “coming home to roost and I see no light at the end of the tunnel for Telecom.”

He says it would be impossible to turn the company around in only a few quarters.

“You would need to spend hundreds of millions of dollars on the New Zealand network each year. Where is that money going to come from?”

Budde says Telecom’s handling of AAPT in Australia is also going to cause the company problems.

“It's put the CDMA rollout on hold. It's dropped the ball on LMDS and Optus has beaten it to the punch. All the entrepreneurial people that made AAPT the company it is have gone, replaced by Telecom people.”

Meanwhile, Telecom was taking a relaxed approach to the outage of its DNS server, which happened the day before its Thursday results announcement.

Its corporate website, from which the company runs a range of customer services, and all those using domains listed on its two main DNS servers, ish1.telecom.co.nz and ish2.telecom.co.nz, were unavailable because both nameservers were not responding to queries.

“It didn’t knock out internal email at all. Internally it was fine. It was just a domain name server,” says Telecom spokeswoman Anna Hughes. She says email services within and beyond Telecom’s internal network were unaffected.

There were suggestions on a local mailing list that the system administrators had performed a software upgrade on the servers without backing up their zone files. It appeared that information on the servers was being changed on the fly. Service was restored at around 9.30pm on Wednesday, but some glitches were still apparent.

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