Telecom has confirmed rumours that it will cut 200 management jobs before the end of the company's financial year ending June 30.READ ALSOTelecom's ‘fictional' guidanceTelecom slashes earnings forecast for 2011-2013
Telecom has confirmed rumours that it will cut 200 management jobs before the end of the company's financial year ending June 30.
READ ALSO
Telecom’s ‘fictional’ guidance
Telecom slashes earnings forecast for 2011-2013
"We anticipate with an increased focus in cost that there will be a further reduction in head count [beyond the 200]," said chief executive Paul Reynolds, sounding uncharacteristically flat.
Dr Reynolds said none of the cuts would be in "customer-facing" or operational positions.
The cuts come in the wake of today's earnings downgrade, which was blamed on XT's problems, the economic slowdown, an increasingly competitive market, and regulatory woes.
According to page 132 of its 2009 annual report, Telecom had a whopping 2865 employees earning more than $100,000 (out of a total headcount of around 8000) - indicating a robust number of managers.
AAPT sale?
Speaking on the same phone conference to analysts and media at 4pm today, CFO Russ Houlden said Telecom's new dividend - widely expected to be around 18 cents - would not be announced until next month.
Asked about this morning's AAPT sale rumours, Dr Reynolds called Telecom's fully-owned Australian subsidiary "non-core" and that "If an offer comes along that’s in the interest of shareholders we would give that serious consideration".
"We've managed AAPT hard over the past two years to achieve positive free cashflow," said Dr Reynolds.
However, the chief executive prefixed his comments by saying that Telecom only mentioned AAPT in today's statement because "you guys are thinking about it so much".
Asked if he would potentially sell part of AAPT, Dr Reynolds said that would be "possible".
Analysts at Forsyth Barr and Craigs IP told NBR that AAPT (bought for $2.2 billion at the height of the dot com boom) was today worth around $A400 million, or roughly four times ebitda. (Read analysts' extended take on AAPT's valuation in NBR's original story on today's announcement here.)
Mr Houlden said on the call that its book value was in "the $A500 millions" but could not immediately provide an exact figure.
New players, new pressure
Dr Reynolds said Telecom was feeling "the pressure of new players in the New Zealand market", which he said was becoming more competitive.
The price of data was named as a pressure-point.
XT numbers
Dr Reynolds said that as of March 1, there were 585,000 Telecom customers on XT, an increase of 128,000 over December 1.
52% of XT customers were post-paid as of March 1.
However, overall, Telecom lost 19,000 mobile customers during its March quarter.
Dr Reynolds described the 19,000 as "low-value customers" and said that mobile numbers at services division Gen-i were "stable".
Copper regulation in a fibre world
The chief executive reiterated his message that Telecom was subject to government regulations created for a copper world while it tried to position itself for a fibre future.
Still unknown: whether the government is listening (read: Crown Fibre Holdings' Secret Shortlist).
Telecom was pursuing "a full range of approaches" with the government over its ultrafast broadband (UFB) roll-out, said the chief executive.
Asked if he thought his bonus was safe this year, Dr Reynolds had no comment (much of his long-term incentive is tied to Telecom's share price, which has been dropping).
