Sale of Telecom's international division 'speculation'

Telecom says it is "speculation" that it is considering selling its Telecom International division to Canadian company Rogers Communications.

Rogers has 29,000 staff and has annual revenues of more than C$11 billion (NZ$15.5b).

The Telecom International division acts as a broker to 300 telcos, buying and selling capacity on international phone networks. It manages about one in 50 of the world's international voice calls, about five billion minutes a year.

The business had a gross margin of $53 million in the year to June.

Craigs Investment Partners analyst Geoff Zame said a sale would be "left field". "It has always been quite an autonomous part of the business. It is a thin-margin, quite volatile business, and I guess if you could get a good price for it you might do it. It is obviously not core to operations."

He assumed any sale would not include Telecom's half share in the lucrative Southern Cross cable, which links New Zealand, Australia and the United States. IDC Research analyst Rosalie Nelson said the division had always been "pretty much its own division". It had done a good job handling transit phone traffic.

Telecom spokesman Mark Watts said the firm did not comment on speculation.

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