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Telecom defers dividend reinvestments for broadband spend

Friday 5th September 2008

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Telecom Corp., the biggest company on the NZX 50 Index, deferred its dividend reinvestment plan while it considers whether to accelerate investments on faster broadband services.

The company last month said it was evaluating whether to speed the roll-out of its $300 million broadband mobile phone network. Investors who had opted to reinvest the fourth-quarter dividend will receive a cash payment instead, the company said in a statement.

"Telecom considers it is not prudent to proceed with the issue of shares under its dividend reinvestment plan for the upcoming quarterly dividend, or undertake the associated on-market share buyback of Telecom ordinary shares," the company said. "This is a strategically important and material decision."

Telecom is racing rival Vodafone Group which is offering a nationwide broadband network. Vodafone has a larger share of the nation's mobile phone market.

Shares of Telecom fell about 1% to NZ$3.09, near a 15-year low.

By Jonathan Underhill

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