Telecom cautious

Although Telecom New Zealand posted a quarterly profit of $162 million ­ up 11% on the same quarter last year ­ the company is more cautious on when it will lift its dividend. At its annual result three months ago chief executive Theresa Gattung said the company wanted to lift its dividend, from 5c a share, at some point over the next financial year.

This week the company was more cautious, saying it is "on track to review dividend payout ratio once we have demonstrated that credits targets can be comfortably maintained." The company is aiming at a credit upgrade from Standard & Poor's later this financial year and is not going to want to risk that. With the world telecommunications sector still carrying massive debt, the company is keen for a higher credit rating to make it stand out. However it appears the company will be spending more on its mobile network.

Accompanying the profit announcement was the strongest indication yet that Telecom is considering shifting building a wide band CDMA network to further compete with Vodafone, which is now ahead of Telecom mobile telephone customers.

A further uncertainty for Telecom is the "local loop unbundling" determination from the Commerce Commission, which would force it to open up its local network to competitors.

     

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.

Related News:

Trustpower signals $11 mln profit boost from metering sale
Chorus defeats secrecy breach claim
Hedging losses drag Kiwi Property first-half net profit down 23.8%
Sky predicts revenue and earnings fall for FY20
Steel & Tube warns of further hit to first-half profit
A2 Milk's AGM should sort the bulls from the bears
Has NZ reached the lower limits of monetary policy?
NZ dollar maintains gains on China-US talks, local rate outlook
MARKET CLOSE: NZ shares edge lower; power companies under pressure
NZ dollar rises as bets on another OCR cut fade