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Telecom Corporation of New Zealand Limited (TEL) reported a net profit of $97 million for the March quarter, down 39% on the $159 million profit reported a year earlier. The company said it now expects guidance for adjusted group net earnings for the year to be in the lower half of the $400 million to $440 million range that was previously announced.

Telecom said adjusted EBITDA for the nine months to 31 March 2010 was down 1.9% to NZ$1.34 billion on the previous corresponding period and in line with guidance.

The company said while adjusted revenue for the nine months fell by 7.7% to $3.94 billion, adjusted operating expenses fell faster, to $2.60 billion, a 10.4% decrease on the equivalent nine months.

CEO, Paul Reynolds, said the result had been delivered in a very challenging operating environment, including increased competition, the continued impact of the economic slowdown, further regulatory interventions and issues with its XT network.

“With the results of the independent review of XT now before us, our focus is on further improving the resilience of the network and translating that effort into further growth in customers,” Dr Reynolds said.

The company said adjusted EBITDA in FY10 would be at the lower end of the -1% to +2% guidance range previously announced in comparison with FY09.

Telecom declared a third quarter dividend of 6c per share, with no imputation credits.

As at 1127 AEST, Telecom shares were down 4.5c to $1.67.

The Australian government has released the long awaited reported into the National Broadband Network, which the government said showed the delivery of the high-speed internet network is "achievable, and can be built on a financially viable basis with affordable prices for consumers". The report also indicated that it would be commercially logical to build the network in partnership with Telstra, however if the government retained ownership of NBN, it would receive a return on its investment regardless.

Without Telstra, the government could build the network for around $38 billion, the report said.

Minister for Broadband, Communications and the Digital Economy, Stephen Conroy said the national broadband network would transform life and business with Australia, however he declined to commit to whether Telstra would be involved in the development of the network, instead suggesting that the government was able to go it alone if need be.

"The study confirms that the NBN business model establishes that taxpayers are paid back their investment with a modest return by year 15 of the project on the basis that privatisation is completed,” Mr Conroy added.

The modest return would be around $40 billion over 15 years, from the $26 billion investment.

Other key findings in the result was that the peak investment by the government would be $26 billion by the end of year seven, of which $18.3 billion would be required over the next four years.

Meanwhile, the lower price tag than the widely touted $43 billion for the NBN, was predicated on returns coming in by those timeframes.

The report also said that entry level wholesale prices on the fibre should be set at around $30-35 per month for basic broadband 20Mbps plus voice service "to drive affordable retail prices and better value for money for consumers compared to what is available today".

The higher speed broadband service would be available for around $50 per month, the minister said.

"The study confirms that the NBN can provide consumers with faster speeds and better download limits for comparable prices to what they pay in the market today,” Mr Conroy said.

Other findings included that the fibre component of the NBN should be extended from 90% to 93% and cover the 1.3 million new premises expected to be built by 2017-18; while satellite services would be available for where fibre connection was not possible.

Telstra shares were trading up 1c at $3.14 per share by 1441 AEST.

Telstra Corporation Limited (TLS) said the rumour regarding the conclusion of National Broadband Network ("NBN") negotiations is unfounded. Media reports suggested the telecommunications giant and the Federal Government had reached a deal worth over $9 billion.

Telstra said as has been previously advised negotiations are continuing in relation to NBN.

The company said these negotiations remain incomplete and confidential.

Telstra shares climbed 9c, or 2.9% to $3.19 on the rumours yesterday.

iiNet Limited (IIN) announced that it as entered into a binding agreement to acquire Netspace for $40 million. The company said the acquisition would lift its fixed line broadband market share to 12.4%, towards its 15% target, with an increase of over 70,000 broadband customers to more than 520,000 broadband customers, and an increase of over 120,000 active services to around 920,000 total active services.

iiNet said the acquisition would be EPS accretive (pre-synergies) from the first full year.

The company expects Netspace to generate over $70 million of revenue and $8 million of EBITDA in FY11 before synergies.

CEO, Michael Malone, said Netspace is a natural fit for the company given the strong alignment of the companies’ products, networks and cultures.

“It is a great business, having grown strongly in the residential market, and has a loyal customer base given its customer service focus,” M Malone said.

“In addition, the geographic footprint of Netspace is very complementary to iiNet, extending our presence in the key markets of Victoria, New South Wales, and Tasmania.”

The company expects to realise significant potential synergies, including $2 million in the first year and $5 million in the second year of iiNet’s ownership, through the migration of Netspace customers to iiNet’s network and through lower bandwidth costs.

iiNet said the acquisition consideration would be 100% debt fund, with completion expected to be achieved by 30 April 2010.

As at 1346 AEDT, iiNet shares were up 15c to $2.60.

Telstra Corporation Limited (TLS) CEO David Thodey announced this morning that he has reorganised his management team as the telco struggles with a flagging share price and NBN concerns. The overhauled executive structure also includes a new consumer chief.

The changes consolidate the company’s top executives into four main groups, customer sales and support; product and marketing innovation; operations; and corporate support, Telstra said.

Mr Thodey said the changes would focus attention back on the customer.

“Telstra’s core objectives are to provide our customers with innovative products and services, and to serve our customers better than anybody else,” Mr Thodey said.

Mr Thodey has appointed Gordon Ballantyne, formerly of Hewlett Packard, to oversee all of Telstra’s consumer retail sales outlets.

Elsewhere, Kate McKenzie, formerly GMD of Strategic Marketing would take over in the newly created position of chief marketing officer.

The reshuffle also expands the role of Robert Nason, group managing director of Customer Experience, Simplicity and Productivity, to include responsibility for corporate strategy, mergers and acquisitions, and the Program Office.

At the close Friday Telstra were trading at $3.06.

TPG Telecom Limited (TPM) upgraded its FY10 EBITDA guidance from $140 million – $150 million to $152 million – $158 million. The company also announced group EBITDA of $77.1 million and a net profit after tax of $27.5 million for the half year ended 31 January 2010.

TPG Telecom said the results represent a 34% increase on the EBITDA achieved in the corresponding period and a 443% increase on the NPAT achieved for the same period.

The company reported earnings per share of 3.8 cents for the six-month period.

TPG Telecom said broadband subscriber growth has continued strongly, with net additions of 54,000 in the six months to 31 January 2010, 48,000 of which were on-net, and subscribers totaling 460,000 at March 2010.

The company said it had accumulated cash reserves of $47.2 million, after paying $17.6 million in the half year to subscribe for 2.8 million shares in Pipe Networks Limited.

“These cash reserves will be used, together with the $66.2m raised through the institutional placement and share purchase plan conducted in February, and the new debt facility signed in March, to fund the acquisition of 100% of the remaining shares in Pipe under the scheme of arrangement approved on 17 March and payable on 31 March 2010,” TPG said.

The acquisition of Pipe Networks became effective on 17 March 2010 after being unanimously supported by Pipe’s board and 94% of the company’s shareholders.

TPG Telecom declared a fully franked interim dividend of 2c per share.

At the close of trade Monday, TPG Telecom shares were trading at $2.12.

Telstra Corporation Limited (TLS) said there is currently a significant gap between Telstra and NBN Co on what each party considers to be an acceptable financial outcome in regards to the negotiations regarding the future of Telstra’s fixed local access network and associated matters. The company said there are also a range of commercial matters that are yet to be agreed.

Telstra’s statement follows what it said, “have been a number of recent media articles speculating on the status of Telstra's negotiations in relation to the National Broadband Network”.

The company said the Government and NBN Co are approaching the negotiations on a “business-to-business” basis.

Additionally, Telstra said it is discussing ways in which the gap can be bridged, recognising that the Government has highlighted the national interest benefits of the NBN and reform of the telecommunications industry.

“Further, as Telstra has stated in its submissions to Government, a range of legislative changes and regulatory approvals will be needed for an agreement to be implemented,” the company said.

As at 1021 AEDT, Telstra shares were unchanged at $3.17.

Telstra Corporation Limited (TLS) announced the completion of a 10-year benchmark €1 billion Eurobond issue, with a 4.25% annual coupon and a maturity of 23 March 2020. The company said the bond was about six times oversubscribed with an order book comprising almost 300 individual orders from a wide range of high quality fixed income investors, including fund managers, insurance companies and banks.

Telstra said issue proceeds would be used mainly for retiring shorter-term bank debt and for general working capital purposes.

Chief financial officer, John Stanhope, said the Eurobond issue represents Telstra’s successful return to the debt capital markets after a period of absence following the global financial crisis.

“It demonstrates the investor interest in Telstra's solid credit and business fundamentals as Australia’s largest telecommunications service provider,” Mr Stanhope said.

“The offering achieved pricing at the tight end of market guidance and reflects the improving market sentiment and investor demand in the Euro market, and the excellent work by the joint lead managers.”

Mr Stanhope added that the successful bond issue, which would provide Telstra with around $1.5 billion of cost effective long-term funding and help to lengthen the average maturity of Telstra's debt portfolio.

At the close of trade yesterday, Telstra shares were trading at $3.04.

Concerns about the National Broadband Network reported earlier today have seen Telstra Corporation Limited's (TLS) shares hit a low of $2.90. Shares in Australia’s largest telco have never traded for less.

One month ago Telstra’s shares were trading at $3.44, a fall of 15% in February on the back of disappointing earnings and an unflattering outlook for the telco which has seen landline rentals slump and increased competition in the mobile and internet space.

The company, which first listed in 1998, hit an all-time high of $9.20 early the following year.

At the depths of the global financial crisis, Telstra shares touched $2.93 on 19 March 2009 before recovering to around $3.65 in August last year.

At today’s prices, Telstra has a market capitalisation of $36 billion, placing it between retailers Woolworths ($34 billion) and Wesfarmers ($37 billion).

Woodside, by comparison, has a market capitalisation of $33.7 billion.

Telstra Corporation Limited (TLS) said, in an update on National Broadband Network (“NBN”) and Government Legislation to shareholders, that there are several complex issues about which it awaits clarification from the Government and NBN Co. The nation’s largest telco said such commercial discussions couldn’t be divorced from the current legislative risks the company faces.

Telstra brought two matters to shareholders attention in the open letter.

The first was that the Federal Government’s proposed regulatory reform package for the telecommunications industry looks likely to be debated in the Senate in the second or third week of March, while the second was that last week, the Federal Government released the NBN Co Exposure Draft Legislation that could significantly alter NBN Co’s ‘wholesale-only’ business model.

The company said its position on this Bill has not changed.

“While we support the Government’s National Broadband Network vision and sensible reforms for our industry, we have always said this legislation is likely to destroy shareholder value and makes an agreement with NBN Co and the Government harder to achieve,” Telstra said.

The company said denying it access to spectrum would harm not only shareholders, but also consumers, particularly those in rural and regional Australia.

Telstra also said the powers the legislation gives the ACCC and the Minister send a negative signal to investors in the industry and the country, while functional separation could cost Telstra $1 billion and take five years to implement, damaging customer service and providing no real benefits to consumers.

In relation to the draft legislation that would govern how NBN Co is operated and regulated, the company said it raised for the first time the prospect of NBN Co becoming a Government-funded retailer, not just a wholesale network provider.

“Such an outcome would run counter to the core purpose of the NBN and the Government’s primary policy objective of restructuring the industry to have separate providers for retail and wholesale fixed network services,” Telstra said.

“We are very concerned about this potential change in the Government’s position. If enacted, we would need to factor this into the financial consideration required to achieve an agreement that is in the company’s and your best interests.”

At the close of trade Monday, Telstra shares were trading at $2.94.