Telecom making progress

In the three months ended March total revenue grew 30% to $1.606 billion compared with last year, while net earnings jumped 89% to $381 million.

However comparisons can't be made directly because the quarter contains full ownership revenue from AAPT as well as the anticipated $245 million dividend from its Southern Cross Cable business.

Overall operating margins grew from 30.7% in the same quarter last year to 37%. Once again the most positive news in the latest quarter has come from the company's data and internet services.

In New Zealand data revenue rose 11.7% and in Australia data income was up 59.3% due to expansion in AAPT's data network services and the establishment of a Commonwealth Bank of Australia contract.

Internet revenues also improved in both markets, up 19% in New Zealand based on sustained growth in customers and usage.

In Australia the group's connect.com.au Internet and e-commerce business increased revenue 53.3% for the quarter.

Telecom will also be taking heart from revenue growth in its New Zealand mobile business which grew marginally, by 0.7%, for the quarter. This is a reversal of the trend at the half-year when total mobile revenue fell by 1.1%.

CEO Theresa Gattung says net connection growth for the quarter was 118,000 customers, taking the total number of mobile customers to 1.269 million.

"It has been another strong quarter, with good connection growth and stable margins in the lead up to the launch of our new CDMA network."

In Australia the group's mobile service reseller business achieved 15.8% revenue growth for the quarter, with total customers rising to 241,000.

The company has also managed a slight decrease in New Zealand expenses for the quarter, dropping 0.2%. However expense growth in Australia was 48.2% which the company says is due to growth in revenues, AAPT's offer of Smartchat telephony services.

Telecom is paying a dividend of 5 cents per share for the quarter.

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