TelstraClear earnings, customers rise

TOM PULLAR-STRECKER
Last updated 16:05 09/08/2012

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TelstraClear and Vodafone could between them boast more than 30 per cent of the home broadband market after what TelstraClear boss Allan Freeth labelled a "fantastic year" for the company.

Telstra's annual results showed the revenues of its New Zealand subsidiary dropped 3.9 per cent to $644 million, but its earnings before interest, tax, depreciation and amortisation were up 18 per cent at $127m.

TelstraClear chief executive Allan Freeth said it had signed up an additional 40,000 customers over the period, increasing the size of its customer base by 7 per cent.

The earnings figure excludes a $165m write-down on goodwill which was taken as a result of Telstra's decision to sell the business to Vodafone. The Commerce Commission has said it could decide whether to approve the takeover as soon as next month.

The commission said in its latest annual monitoring report that TelstraClear had 16 per cent of the home broadband market and Vodafone 13 per cent, while market leader Telecom had 49 per cent. But Freeth believed its own market share had probably increased to 17-18 per cent.

TelstraClear has been selling a DSL-based phone and 40 gigabyte broadband plan for $75 a month and Freeth said it had been making seven or eight times more sales than normal on some days.

"We had a particularly good response in provincial centres where the full effects of competition had not been felt."

It won the business of the Justice Ministry, ACC and the Salvation Army during the year, he said. 

Vodafone chief executive Russell Stanners has said he would assume control of the merged business, if the takeover of TelstraClear was approved. Freeth said he was focused on getting the company to the point of the handover and would think about his own future at that point.

The company's 1300 staff had taken the takeover surprisingly well in their stride, he said. Freeth revealed he had canned the planned launch of an internet television service as a result of the discussions, but said it remained "business as usual".

TelstraClear had signed up some consumers to ultrafast broadband plans in Whangarei and was "UFB-ready" but did not expect to launch a consumer UFB service nationwide before the merger was done and dusted.

At the moment UFB was not sufficiently widely available to justify a launch, he said.

"There are still a number of things that haven't been sorted out in terms of the cost of connecting from the street to the premise."

Parent Telstra reported a 1.1 per cent rise in revenues to A$25.4 billion ($33.1 billion) with profits up 5.4 per cent at A$3.4b. Analyst Ovum said its strong cash flows meant its "infrastructure leadership, particularly in mobile" would not be threatened in the foreseeable future.

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- © Fairfax NZ News

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