Telecom strategy under scrutiny

Telecom's first-half 2013 report today is likely be to scrutinised for its strategic outlook and review process, as much as its bottom-line result.

Craigs Investment Partners broker, Greg Easton, said today's report for the half-year was expected to be in line with expectations, with net earnings booked of $158 million and earnings before interest, tax, depreciation and amortisation (ebitda) at $520 million, for the first-half trading to December.

However, he noted Telecom had signalled it was again going to change the way it reports its financial results.

''The result will be overshadowed by announcements regarding Telecom's strategy review which will be a high-level outline, with detail to come in May,'' Mr Easton said. Forsyth Barr broker Suzanne Kinnaird said revenue was expected to be down 2% to $2.27 billion, while ebitda was expected to be up 3% to $503 million.

She forecast profit up 66% to $163 million, because of lower interest charges, tax and depreciation, associated with the Chorus split last year.

Because Telecom hadlaunched market-matching fixed line and mobile plans last year, it reflected a ''new willingness'' to take a short-term ''hit'', in order to retain customers, she said.

''Overall, we expect the retail business to have halted its share decline in both fixed and mobile shares,'' Ms Kinnaird saidWith a new chief executive, Simon Moutter, Mr Easton said there would ''undoubtedly be a few surprises in this report''.

He expected cost savings to be a feature of the report, but also investment in implementing new cost structures and future growth opportunities''The potential for a reset of the business seems to have investors sitting on the sidelines,'' he said.

However, Ms Kinnaird expected Telecom to hold back any ''major revelations'' on strategic objectives, instead leaving details until midyear, and today to just reiterate an emphasis on market share, costs and customer focus plans.

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