Sharechat Logo

Telecom cautious

Friday 7th November 2003

Text too small?
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.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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.

Related News:

12th November 2019 Morning Report
MARKET CLOSE: NZ shares gain, retirement villages buoyed by Auckland housing market bounce
NZ dollar rises, shrugging off US-China trade war woes
Long-serving ACC investment chief calls it a day
Institutional investors continue to shun Fonterra
Card spending stalls; dearer petrol crowds out other goods
Abano directors cave to takeover by scheme of arrangement
Fletcher dismisses subcontractor claims as vague
11th November 2019 Morning Report
Odds favour a rate cut but it's a line ball call

IRG See IRG research reports