LIVE BLOG: Telecom half-year results

See NBR's story on Telecom's half-year result here. The blog below if from the company's analyst briefing at its Auckland headquarters.

11.40am: Asked by NBR to contrast IBM's flash new data centre with Telecom's Airedale Street facility, Gen-i boss Chris Quin quipped "ours has customers"

11.35am: Speaking to NBR immediately after the briefing, Deutsche Bank analyst Geoff Zame said there were no major surprises in today's result. When adjusted items were allowed for, it was a little weaker than he'd been expecting.

He saw the decline in capital expenditure as positive. "They've had the highest capex-to-sales ratio of any telco in the past 20 years so they've got to nail that." At first glance, the retail broadband numbers seemed disappointing, Zame said. Overall, it was a neutral result (Zame has a "hold" rating on the company.

Mr Zame bemoaned that with the switch from quarterly to half-yearly reporting, there would be no new numbers until August.

11.30am: Tuanz chief executive Paul Brislen asks a side question to Telecom's communications manager: Will XT gear be co-located on the celltowers to be built by Telecom under the $300 million rural broadband initiative (assuming the contract is finalised with the government? That question would be answered later.

11.21am: Another question on whether they'll be more supplier settlements, this time from Credit Suisse's Greg Main: Reynolds - There will always be supplier settlements from time-to-time. "I think we're going to have some more in future" [smiles at Olson].

11.17am: Olson - If Telecom wins Crown Fibre business, capex will increase.

11.12am Reynolds - Been a lot of data price competition, but "there's limit to how far that can go".

11.04am. Comment from analyst Guy Hallwright - most mobile growth for the half-year was mostly in pre-pay. Vodafone's growth was in contract/post-pay. Retail boss Alan Gourdie: small to medium business was strong; Gen-i's Chris Quin notes Gen-i's 5% mobile growth was all contract.

11.03am: Olson: It's impossible for Telecom to raise debt with UFB uncertainty (though supportive bankers will rollover existing arrangements)

11.02am: Zame: What's the project timetable, once govt makes UFB decision? Reynolds: We'll name a separation timetable at the time. "It's a substantial programme".

11.01am: Olson - Gen-i now around 36% of  phone business is smartphone (16% at retail). Data going up but also voice revenue. "And that's a result of our Android strategy".

10.59am. Question from Geoff Zame - supplier compensation [$14 from Alcatel Lucent on XT]; is there more to come. Reynolds - shouldn't assume will be the last, but won't go on in perpetuity.

10.47: Reynolds - Pleased with Commerce Commission to deregulate some wholesale pricing, draft decision to re-regulate urban bitstream; "great decision" not to regulate VDSL pricing. Still things structural separation regulations are way to complex. Rate of return needs to be factored in a lot more. Likes UK with its "bias against regulation overall" and self-regulation; looks for opportunities to deregulate.

10.46: Reynolds - MTR regulation. Cuts are big; "Small upside for Telecom" as a net payer of mobile termination charges to Vodafone but long term will cause price pressure. Final decision March. "For our part, we just want to get on with it.

10.44am: Reynolds back onstage. If reach a deal with CFH will re-assess structural separation timetable. It's a "gigantic exercise". RBI: In negotiations with Vodafone, government. "We will engage energetically". Doesn't look like he's going to giveaway anything new on either project. 

10.42am:  Who's here? Tuanz boss Paul Brislen; Vodafone's David Diprose, TelstraClear's David Fisher. The latter two headed elsewhere in the building after I bumped into them at reception. Diprose said they were there for UBA (unbundled bitstream access) broadband discussion.

10.38am: Olson - Wholesale and Retail paid greater internal charges to Chorus

10.37am: Olson - Huge extra tax bill (see main story) was a one-off.

10.34am: New(ish) CFO Nick Olson takes the stage.Wants to highlight headcount. IT services head count grew 4%, retail headcount fell 5% - overall labour cost down 4%. Cost increase when around 300 staff from outsource partner HP/EDS move to Telecom.

10.30am: Gen-i mobile growth up 5%; loss of CBA contract (which Gen-i did not bid for when it came up for tender) finally starting to bite.

10.26am: Reynolds: Smartphone penetration in NZ is low.

10.25am: Retail broadband churn affected by elimination of Big Time (all-you-can-eat) plan.

10.22am: Reynolds says Telecom Wholesales "external ebitda" (+9%) is the headline number. It's overall ebitda (-58%) reflects change in internal cost allocation [interesting given Telecom Wholesale would be in the retail/service half - in Telecom's ideal scenario - rather than the network/Chorus2 half of the company if it splits to win Crown Fibre business].

10.19am: 101 exchanges now unbundled

10.17am: Gen-i ebitda up 15% up over first half 2010. Cloud growth helps. Reynolds sees opportunity in one-government purchase strategy.

10.16am: Average revenue per user up with XT customers with more data use. Up 16% for those using smartphones - but overall mobile revenue falls 4% due to lower handset sales compared to the XT launch frenzy.

10.15am: Expected 3% overall mobile market growth for year. Looking more like 1%. Slow return to growth after recession blamed, plus more competition. 

10.11am: Fibre connection market growing at 20% a year ahead of the UFB, Reynolds says.

10.08am: Underlying 28% fall in local calling revenue is good by global standards, Reynolds says. Local free calling means New Zealand has fewer people going mobile phone-only compared to other countries.

10.07am: Reynolds notes result includes $14 million in "supplier settlements", presumably a second major payment from Alcatel-Lucent in relation to last year's XT outages.