Telstra roadshow in NZ today

By NZPA

Thursday 3rd October 2002

Australian telecommunications giant Telstra is confident its New Zealand offshoot will gain a larger share of the Auckland residential market, a senior executive said today.

However, Telstra chief financial officer David Moffatt said he would prefer TelstraClear to achieve that without having to build its own network in the city.

Mr Moffatt was in New Zealand for the day with two other colleagues to talk to reporters and analysts about Telstra's New Zealand dollar-denominated commercial paper programme.

The unlimited commercial paper programme will go at least in part towards TelstraClear, which recently refinanced its $NZ600 million debt facility with Telstra.

Mr Moffatt said TelstraClear, of which Telstra owns 58.4 percent, wanted a bigger involvement in the Auckland residential market.

The logical way was for TelstraClear to give customers a choice by developing an appropriate access regime to the Telecom network, he said.

That was the first preference, and it was up to Telecom.

Other options included the establishment of a telecommunications network in Auckland, for which TelstraClear had sought resource consents, Mr Moffatt said.

Consent applications for such a network, which would involve cables above ground on poles, had been made in Auckland and Manukau cities.

Mr Moffatt said the industry had to tackle the real question of increasing the total market. A regulatory framework to do so would come down to the attitude of the players and whether they wanted to grow the telecommunications industry, he said.

Reasonable interconnection rates between different companies' networks were needed, and if that happened the whole market would be better off.

However, that level of maturity was probably a couple of years away in New Zealand, he said.

Mr Moffatt was impatient for TelstraClear to become profitable, and the company was getting closer to reaching that point on an after-tax basis. However, he would not give targets and said the business was not run that way.

In the seven months to June 30 TelstraClear, formed from the merger of TelstraSaturn and Clear Communications in December, lost $A114 million ($NZ132.5 million). Telstra's latest profit was $A3.66 billion.

Mr Moffatt said TelstraClear could build market share by focusing on customers and leveraging its strengths, he said.

The purpose of the capital raising was partly to broaden interest in the Telstra Corporation in international capital markets, he said.

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