Microsoft and Telecom team up

Under the partnership agreement the new portal will be called XtraMSN, combining Xtra's content with a number of MSN services including Hotmail and Messenger.

Xtra will manage the operation, development and marketing of the new portal, which is due to be launched in around three months.

Microsoft says it will take up $300 million in convertible notes issued by Telecom.

The new securities, with a coupon rate of 5.4% and a 7-year maturity, may be converted to ordinary shares at a strike price of $8.32.

Telecom CEO, Theresa Gattung, says the new portal and associated investment by Microsoft is a significant development in the New Zealand communications market.

"Microsoft's technology contribution to the new portal and their $300 million investment in Telecom is an encouraging endorsement of our ongoing growth strategy."

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