Clear clears hurdle with $2 million profit

By Rob Hosking

Friday 28th September 2001

ON TRACK: Mr Kaliaropoulos says BT's priorities now elsewhere

Clear Communications has stopped costing its owner, British Telecom, money and any sale could be some way off.

The company showed an operating profit of $2 million for the year to March, chief executive Peter Kaliaropoulos told The National Business Review yesterday.

"There were some extraordinary items, mostly the court settlement with BCL, but the return we are about to file with the Companies Office shows we were in the black by $2 million, after a $37 million loss the previous year."

Six months into the company's current financial year, Clear was on track for a $27 million bottom line profit, he said.

Speculation about the future ownership of Clear has not abated in recent months and Mr Kaliaropoulos concedes BT's priorities are now elsewhere.

"I don't believe BT has changed its strategy from focusing on Europe," he said.

"So companies like us are less relevant to them. But they are paying down their debt far quicker than they expected, and they are still trying to realise value from this company. We are now able to fund our capex from our own cashflow, so there is no desperation. There is certainly no fire sale."

The company will put $150 million into capital spending on new networks in the current year. That follows $235 million investment last year - spending which included buying spectrum for mobile services.

Clear's main growth was in the data services area, he said, which had shown a 26% rise this year. That was compared with a 2% growth in the fixed line market.

"Areas like applications service provision (ASP), where clients rent software over our network, is one part of that growth in data, as is internet access, both broadband and narrowband. And we've seen several call centres relocate from Australia to New Zealand, and that is another area that's fuelling growth."

Demand for broadband services was now not likely to grow as fast as many in the industry believed a few years ago.

"For a lot of firms the business case is not there. A lot of firms built infrastructure in the believe that the applications would be there, and that hasn't happened."

In the residential market, there had also been an unspoken assumption that people would spend more time in front of a television or a PC than in fact they have been prepared to.

"That hasn't happened either. "

Telecom's prospects

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