Telecom opts out of mobile JV

By Phil Boeyen, ShareChat Business News Editor

Wednesday 27th June 2001

Australian company Mobile Innovations says it will make a trading loss on its New Zealand operations after Telecom (NZSE; TEL) chose not to proceed with a planned joint venture.

Mobile Innovations is a direct marketer of mobile phones and manages 10% of Vodafone's post-paid mobile telephony customers in Australia.

Last year the company entered into a direct marketing arrangement to sell Telecom's mobile services in catalogues and direct mail campaigns and in February announced plans for an Auckland-based joint venture with the New Zealand telco.

However Mobile Innovations CEO, Jonathan Marchbank, says now that Telecom is not going ahead with the venture the company is reviewing its New Zealand operations.

"Telecom New Zealand's change of strategy is very disappointing but understandable given current market conditions.

"While we are still reviewing the value and ongoing viability of our New Zealand operations, it is now clear we will have to report a trading loss for New Zealand this financial year, as a result of the joint venture not proceeding."

Mr Marchbank says net profit after tax for the year ending June has now been revised down to A$3 million from earlier forecasts of up to A$4.5 million.

The forecast result will still be a 30% jump on last year's profit.

Despite the expected trading loss in New Zealand, Mobile Innovations it has proved its business model works here and the company continues to have ongoing revenues from 12,000 New Zealand customers, acquired over the last nine months.

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