New Zealand’s largest operator Telecom Corp has said that it will increase shareholder dividend payments by 50% to NZD0.075 a share in the first and second quarters of 2004 after recording a 21.3% hike in net profits to NZD365 million during the six months to the end of December 2003. The telco reported total revenues of NZD2.67 billion for the period, a rise of 2.6% from a year earlier, as rising data and internet traffic helped offset declining turnover from traditional fixed line telephony services. The increased dividend has also been made possible by a NZD578 million reduction in Telecom’s net debt to NZD4.116 billion. Chairman Roderick Deane told reporters yesterday that he plans to raise dividend payments to 70% of earnings before amortization and non-cash items by the final quarter of 2005, up from the current level of 50%.
Domestic operations accounted for NZD1.93 billion, or 72% of Telecom’s total revenues in the second half of 2003, representing a rise of 3%, with its Australian activities contributing the remainder. Turnover from its domestic fixed line telephony services fell by 10.6% to NZD245 million, but this was offset by a 14.1% rise in data and internet revenues to NZD170 million, and a 3.4% rise in cellular turnover to NZD152 million. The operator said connections to its residential Jetstream DSL service rose by 12% in the final three months of 2003 to 56,000, with business connections rising by 10% to 34,000. Telecom’s cellular subscriber base rose by 32,000 to 1.302 million, of which 766,000 were prepaid customers. CDMA customers numbered 508,000, of which 97,000 were added in the three months to the end of December. Postpaid ARPU rose slightly from NZD74.7 to NZD75.1, whilst prepaid ARPU rose from NZD6.5 to NZD7.2. The company had a capital expenditure of NZD219 million in the final six months of 2003.