Network split to cause profit fall at Telecom

23 Jul 2007

A report by Macquarie Equities cited by the Dominion Post is forecasting that Telecom New Zealand could face a 10% drop in annual profit over the next two years. The study says increased competition and costs associated with separating its retail and networks businesses will hit Telecom hard. The report goes on to say that the regulator’s decision to split the wholesale and retail operations will be ‘deeply intrusive and expensive’.

Meanwhile, local website Computerworld has reported that New Zealand 3G cellular licensee, NZ Communications (formerly Econet Wireless), has signed a national roaming agreement with Vodafone which will allow it to offer national coverage as it builds out its own infrastructure. NZ Communications is also reported to be considering a tie-up with UK-owned reseller Virgin Mobile, which already has operations in the region through a venture in Australia.

New Zealand, Spark New Zealand Group, Two Degrees Mobile (2degrees)