Chief executive Paul Reynolds said the company now expected the full-year capex spend to be within the $900 million to $930 million range for the full-year 2001 financial year, down from the $950 million to $1 billion indicated previously.
In addition, Telecom introduced guidance for 2012, indicating that capex for that period would be now more than $750 million. Guidance for 2013 had been withdrawn.
"This reduction comes as we complete significant multiyear programmes of investment, such as the XT mobile network and fibre-to-the-node and look to bring our capex-to-sales ratio closer to that of our international peers," Dr Reynolds said at a media briefing reviewing the three months ended March 31.
Telecom would drive more efficient investment through avoiding duplication of waste along with ensuring investment delivered products and services that New Zealanders wanted as well as generating appropriating returns, he said.
Forsyth Barr broker Suzanne Kinnaird said Telecom's third-quarter operating statistics showed little change from recent trends.
The XT mobile network grew but did not generate growth in Telecom's share of the market.
Telecom customers were still migrating from CDMA to XT.
Access lines were little changed and Telecom's retail share of broadband customer growth in the third quarter was better than the previous two quarters, she said.
Staff numbers were up slightly but that was due to some outsourced IT staff brought back in-house.
The main news was a reduction in forecast capex with 2012 now to be a maximum of $750 million, which was previously the target for 2013.
Profit guidance - before adjusting items - was unchanged.
Christchurch earthquake costs would be provided for in 2011 as an adjusting item. Insurance recoveries would cover some of the cost but that would take longer to finalise and they would be recognised in 2012, Ms Kinnaird said.
Telecom announced a third-quarter dividend of 3.5c per share with full imputation. The dividend reinvestment plan and on-market buyback had been suspended due to the current status of ultrafast broadband negotiations.
Guidance
2011 Financial Year
• Adjusted EBITDA of $1.72 billion to $1.78 billion
• Depreciation and amortisation of $1 billion to $1 billion
• Effective tax rate of around 33%Adjusted net earnings of $330 million to $370 million
• Capex of $900 million to $930 million (previously $950 million to $1 billion)
2012 Financial Year
• Adjusted EBITDA to increase by $20 million to $80 million
• Effective tax rate of 25% to 28%
• Capex of no more than $750 million
