Forum Archive Index - December 2001

["Viewpoint ." <viewpoint_@hotmail.com>]

The Evening Post proclaims Telecom is looking cheap and has to be the buy 
for 2002.

Sharebrokers will no doubt drum up some business by putting Telecom on their 
hot tips list for 2002.

Telecom signals that it is having difficulty in becoming more efficient by 
sticking prices up because of people like me who dare to use their local 
lines 'excessively'

But will the Telecom share price perform any better in 2002 than it has this 
year? I don't think so.

Earnings are still in decline. From 46.9 cents/share in 1999 earnings were 
only 36.4 cents a share in 2001. The first quarter of 2002 saw another 12% 
fall so what's changed.

Australia supposedly the saviour in respect of the growth story. Some 
positive signs in the results but one Australian broker says '... a 
continued weak performance from the Australian businesses we can only expect 
ongoing slow growth…’. In the rest of the world the number 3 player in the 
market is struggling to make any money. Isn't this Telecom's position in 
Australia? Not good news.

That same broker says  ‘..with a slowing wholesale revenue environment, 
management have stated that that Telecom is unlikely to receive a dividend 
from its stake in Southern Cross' That dividend saved Telecom's performance 
last year. A fantastic return from a brave investment but is it really in 
fact recurring. Anybody enlighten us.

Telecommunication companies throughout the world are still struggling to 
overcome their debt problems. That has resulted in many telcos spinning off 
divisions and specialising in one area of profitable (hopefully) business. 
Telecom's debt is not of the same proportions as say some of the European 
telcos but it is still high. High levels of debt on reducing earnings is not 
a good sign, even if cash flows remain strong.

That's how i see it. let's hear from others.








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