Telecom New Zealand today said its Australian subsidiary, telco AAPT, had in the last six months been rocked by the loss of a number of large corporate and government contracts.
"Competitive conditions impacting on Telecom's Australian operations continue to be highly challenging," the Kiwi telco wrote in its half-yearly results briefing statements issued this morning. "Retail prices continue to decline across all products, while wholesale prices have risen following revisions to key supplier arrangements. This has resulted in a substantial decline in margins."
"These negative trends have been exacerbated by the cessation of substantial corporate and government contracts."
AAPT's operating revenues dipped 4.7 percent to AU$574 million over the period, with earnings before interest, tax, depreciation and amortisation (EDITDA) down 76.2 percent to AU$10 million. However, the company did cut some of the costs out of its operations.
Yet it wasn't all bad news for the embattled AAPT, with Telecom saying significant progress had been made in the company's gradual transformation towards a self-service model for the consumer and small business portion of its business.
"In addition to providing a fully automated self-service capability, the new operating platform also includes provision for online channels and easy to use customer care options via a simple Web interface," Telecom said.
And AAPT did pick up some new and renewed corporate work -- with "16 new business wins and renewed contracts in quarter two," according to Telecom's statement.
It revealed some of those in November, listing, among others, the NSW Department of Education and Training, the Sutherland Shire Council and Sanitarium among its recent wins.
Further moves are also planned to stem the tide of AAPT's problems.
"To respond to the challenges that the Australian operations are facing, further significant investment has been made in sales, customer service and IT capabilities in AAPT in order to support improved customer acquisition and retention programmes," said Telecom.
Telecom also plans to meet some of AAPT's difficulties through the acquisition of business and wholesale telco PowerTel. The planned transaction was announced this week.
Telecom also announced this morning that it would initiate an executive search process for a new chief executive, with incumbent Theresa Gattung to leave her post at the end of June.
