Stories by Tom Pullar Strecker

Analysts preview Telecom first-quarter results

Analysts are hoping a better retail performance will put sparkle into Telecom's first-quarter results on Guy Fawkes day.
But the threat the Government may award some ultrafast broadband (UFB) contracts to electricity lines companies is a bomb sitting under Friday's results.
Craigs Investment Partners analyst Geoff Zame expected Telecom's net profit for the three months to September would almost halve to about $84 million, disregarding any movement in its South Cross Cable dividend.
He said comparisons with last year, when Telecom's first-quarter result was boosted by a $43m tax credit, would be unfair.
Crown Fibre Holdings acknowledged it had missed Sunday's deadline to make recommendations to ministers on who should be awarded the first contracts to build the UFB network, despite saying on Thursday that it was on track to meet that deadline.
A spokesman said there had been no unexpected last-minute issues and recommendations would be made shortly.
While the market was awaiting word on the UFB scheme, it was tough to put the results centre stage, Mr Zame said.
"I am envisaging a little bit of a revenue pick-up because the issues with XT have washed out now, so we should start to see some year-on-year (revenue) growth. Hopefully, perhaps, we will also see some slowing in the rate of decline in calling revenues, because that was pretty drastic through the past financial year."
Revenues from phone calls in the year to June fell by almost a fifth to just over $1 billion.
Forsyth Barr analyst Guy Hallwright forecast an $87m net profit. That assumed a predicted gain of about $25m on the sale of Telecom's AAPT consumer business to iiNet would be roughly cancelled out by a previously flagged reversal of tax credits that could be booked this quarter.
"There has been a slowing trend of revenue loss and I think that will continue – so there may still be a loss, but it will be getting smaller."
This will be the first quarter that Telecom will not receive a payment from competitors under the Telecommunications Services Obligation scheme to meet the cost of providing phone lines to uneconomic customers.
It will instead be contributing to a $50m annual industry levy to fund the Government's $300 rural broadband investment scheme.

Telecom switches off roaming for non-XT customers

Telecom mobile customers who have yet to make the switch to XT are unable to make or receive calls and texts from today when travelling in Australia and other countries that do not have CDMA networks.
The company last night turned off its ''WorldMode'' service, which let owners of some more expensive CDMA mobiles roam overseas on networks based on alternative mobile technology GSM, using a Sim card.
The dual-mode phones were introduced in 2006 as a stop-gap measure ahead of the launch of Telecom's XT mobile network in June last year.
Telecom spokeswoman Emma-Kate Greer said all but 3 percent of customers who used their mobile overseas had switched to XT.
Telecom had phoned and sent postcards to WorldMode customers to ensure they were not caught unawares, she said.
''In the past week, we have sent reminder messages to all customers currently roaming with the contact details for our roaming helpdesk for them to contact us. A further text message was sent [on Tuesday] to all roaming customers again to remind them of the cut off date.''
Telecom will axe its 3G CDMA mobile broadband service at the end of next month, meaning non-XT customers will notice a speed drop when using Telecom phones and datasticks to access the internet or download emails.
It plans to close its CDMA network completely in 2012.
2degrees chief executive Eric Hertz has forecast the changes will create an opportunity for rival network operators to pick up customers, given that not all remaining CDMA customers may switch to XT.

TSO to be replaced by new telecomms development levy

The Government has indicated it will axe the Telecommunications Service Obligation levy that compensates Telecom for servicing uneconomic customers, replacing it with a new “telecommunications development” levy that will help pay for its $300 million initiative to improve rural broadband.
Communications Minister Steven Joyce said the change would not effect Telecom's obligation to provide landlines at rates capped by inflation and unmetered local calls.
The cost to Telecom of servicing uneconomic customers has been estimated by the Commerce Commission at about $70m a year. All major telcos, including Telecom, pay their share.
But Mr Joyce said the method used to calculate the TSO did not take into account the benefit Telecom derived.
"By counting both the costs and the benefits of the TSO it is likely that the TSO levy will reduce to zero for the foreseeable future," he said.
The Government would look to raise $50m a year from the new telecommunications development levy for the next six years.
The Government would fund the first $100m of its rural broadband initiative to roll out fibre to rural schools and fast broadband to 80 per cent of rural households, with the remainder met by the levy.

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