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Company Information

Company at a Glance

Industry:
Diversified Telecommunication Services
Fiscal Year-End:
Jun 09

Company Overview

TEL is the incumbent telecommunication company in NZ. It is the principal supplier of voice and data services to business and residential areas. Since deregulation, it has faced stiff domestic competition and market erosion. As a result, TEL pursued a number of overseas ventures—most notably, during the 1990s, it increased its stake in Southern Cross Cable to 50% and acquired 100% of AAPT in Australia in 2000 and PowerTel in 2007.

Company History

TEL was incorporated in NZ in 1987 and was purchased in 1990 by US companies Ameritech and Verizon (formerly Bell Atlantic), with NZ government retaining one special 'Kiwi' share. In 1991, the company was listed on the NZSX and ASX. Verizon had a major shareholding in TEL until 2003.

Industries Of Operation

Telecom NZ is a major supplier of telecommunications, providing local, national and international services; cellular services; directories; leased circuits; and mobile radio, paging and data and internet communications.

Differentiating Factor

As the incumbent telecommunications company in NZ, TEL provides an extensive range of products and services and, due to the economies of scale, can offer many of these services more cost effectively than its competitors.

Major Customers & Competitors

TEL's major customers are the government, large corporations, small business and residential customers.

TEL's major competitors are Telstra, Vodafone and SingTel.

Research provided by  

Market Statistics

Market Cap ($M):
3,986
Equiv. Shares (M):
1,826
% All Ords:
0.45
12Mth Range ($):
2.00 - 3.96
Turnover ($M pa):
4,809
Index:
S&P/ASX 50
Sector:
Telecommunication Services
Industry Group:
Telecommunication Services
Industry:
Diversified Telecommunication Services
Sub Industry:
Integrated Telecommunication Services

Last 5 Market Sensitive Announcements

Date
Announcment
15-Oct-08 07:07
Media Release - Telecom brings world`s best mobile to NZ
17-Sep-08 13:16
Commerce Commission Media Release
05-Sep-08 08:13
Com Com Media Release
05-Sep-08 06:39
Media Release DRP and BuyBack not to proceed
29-Aug-08 06:59
ComCom media release

Calendar Of Events

Date
Event
02-Oct-08
AGM Date for Final Year Result
12-Sep-08
Dividend Date Payable for Final Year Result (6.6291c 0% franked)
29-Aug-08
Dividend Record Date for Final Year Result (6.6291c 0% franked)
25-Aug-08
Dividend Ex-Dividend Date for Final Year Result (6.6291c 0% franked)
08-Aug-08
Reporting Date for Final Year Result

Directors

Name
Position
W Boyd
Independent Chairman
M Tyler
Independent Director
R McGeogh
Independent Director
R Spithill
Independent Director
Dr M Horn
Independent Director
M P Reynolds
Director
B Paterson
Chairman
J Roberts
Director

Management

Name
Position
M Ratcliffe
CEO
M Verbiest
General Counsel
M P Reynolds
CEO

Substantial Shareholders

Name
% Holding
Commonwealth Bank
10.6
AXA Asia Pacific Holdings Limited
8.8
Mondrian Investment Partners Ltd
6.7
Macquarie Group Limited
6.1
Brandes Investment Partners
5.6

Consensus Recommendation Summary


0
0
1
0
0
Sell Under Perf. Hold Buy Strong Buy

Number of Brokers in Recommendation Summary: 2

Consensus Earnings

FY09 FY10
Consensus EPS1 (c) 21.8 20.6
EPS Growth (%)   -5.8
P/E Ratio (x) 9.2 9.8
P/E Rel. All Ords (x) 0.97 1.16
P/E Rel. Sector (x) 0.73 0.93
Number of Brokers in Earnings Survey: 1 1

1. Consensus EPS is generally "reported EPS" but will vary as to whether it is on a pre or post preference earnings basis. This number is not always on the same basis as the Aegis EPS.

Historical Forecast Earnings And Recommendations

Consensus Recommendations

Consensus information provided by Reuters.

Consensus EPS Forecasts 1

1. Consensus EPS is generally "reported EPS" but will vary as to whether it is on a pre or post preference earnings basis. This number is not always on the same basis as the Aegis EPS.

Peer Recommendation Comparison

  P/E (x) EPS Chg (%) Dividend Yield (%) MktCap ($M) Price ($) Consensus Rec
  08A 08A 08A    
Telstra Corp 13.2 13 7.1 48,777 3.92 Buy
Singtel 13.0 12 3.9 40,280 2.53 Hold
Telstra Instalments n/a n/a n/a 12,555 3.09 none
Telecom NZ 6.4 (18) 11.8 3,986 2.01 Hold
Iinet n/a n/a n/a 196 1.28 Buy

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