There’s something big going down with Telecom.
This morning this notification was made by the NZ stock exchange
NZX Regulation advises that, at the request of the company, it has placed a trading halt on Telecom Corporation of New Zealand Limited Ordinary Shares (TEL) pending a material announcement by the company.
This means something big is happening. What?
More to follow
Sounds like they will announce a much lower than forecasted profit….they need a woman in charge! Bring back Theresa Gattung I say!
“Initial speculation was that the trading halt might relate to a possible sale of its Australian subsidiary AAPT.
Australian telecommunications analyst Paul Budde said rumours had been swirling that Telecom was seeking a buyer for APPT, which would make “total sense”.
He estimated the subsidiary could fetch about A$300 million.”
http://www.stuff.co.nz/business/industries/3585195/Telecom-in-trading-halt
Maybe they’ve sold the XT network to Bernie Madoff?
How are we expected to know what to do without insider trading tips from the PM. Can you help me out Clare, talk to PM perhaps and tell him how we are expect to receive trading tips in situations like this.
Oh poor Bernie – did you know his mother’s maiden name was Munter?!!!
Oh well, in half an hour or so we shall no doubt be put out of our misery…
The trading halt is lifted. Its just that their financial forecasts are for a very poor outlook
Rebecca
I enjoy your sense of humour but Theresa ? Because she is a woman ?
Don’t lower your standards
According to the Stuff website 200 management jobs may be axed at Telecom due to reduced earnings.
Maybe if they had provided services at a better price they would have retained their customer base.
This greedy company is finally getting what it deserves.
John W – I don’t really know enough about Theresa except that mentioning her name tends to rark a few people up! I quite like the look of her book though.
I also admire any woman who gets to the top of their profession. I also find it particularly annoying how she and Helen Clarke would be critiqued on their appearances as much as what they were saying. To me this shows how far we have to go in terms of equality.
Mark: I agree. Can’t say I have ever been a fan of Telecom – Telstra all the way for sure!
The issue for me has always been that Telecom have a monopoly on huge parts of our infrastructure. The local loop unbundling was a good start but until we have alternatives to the Internet (and by alternatives I mean lines going from NZ to overseas which aren’t largely owned by Telecom), we’re not going to see much change in pricing/services. And even if we do get other lines, it’s quite likely that these are put in because NZ makes such a good cash cow so we may not see changes even then.
Thanks Telecom, for setting the example…
Datacap still looks like an abbreviation for “Data Capture” (in regards to documents) overseas.
@Mark
According to the Stuff website 200 management jobs may be axed at Telecom due to reduced earnings.
I agree.
Rebecca – Fair enough. You make a good point about how critics pick on vulnerable areas that often have nothing to do with function.
Helen Clark went through a lot of unwarranted flak over the years in Parliament and some of it orchestrated from outside NZ. Time will show her as one of NZ outstanding professional and principled politicians.
Female or male or other makes no difference to making a valid contribution.
Many bullies find that hard to accept.
Telcom perhaps is reaping the downside of years of having the network restricted to others and charging excessively. Apart from past share price rise and large dividend payment which may have pleased investors, not ploughing sufficient back into the business has longterm ramifications. They certainly seem to have little public sympathy.
The high line charges between providers may also backfire on Telecom. Interesting days ahead.
Nevyn:
Telecom’s broadband wholesale price dropped dramatically at the threat of Kordia hooking up with Australia’s new Pipe Network connecting to Asia, this was an attempt by Telecom to stifle competition by driving down the profit margins thus making potential investors think twice.
The new talk of another cable direct to the US with capability 10 times better than currently being offered by Telecom will see Telecom shrivel up and disappear, and about time!
Good one Clare nothing like stating the obvious!!
Another sad example for the failed neoliberalist ideal wanting to private everything within the context of a so-called “free market”: private sector companies are fully capable of destroying huge amounts of value and running inefficiently/with poor judgement, it happens over and over and over again with stunning amounts of wealth destroyed.
I’m amazed that people can still say with a straight face that a pure private sector operation can always do it better. The disparity between how a well run public sector operation can perform and a well run private sector operation can perform is very small indeed. IMHO it mainly comes down to the quality of leadership and people within the organisation.
Loota
It appears that you are either too young to know or you simply don’t remember what ‘telecom’ was like when it was part of the Post Office. It was a money pit that enjoyed continuous govt funding, it delivered appalling service and was anything but innovative.
Technology has moved along a lot so it is hard to compare the circa $3/min toll call rates that existed between places like Wellington & Auckland with the rates today. Putting that example to one side NZ toll rates were some of the most expensive in the world. From Canberra in the 80’s I could call Wellington cheaper than I could from Napier. Before the reforms of the Lange govt it could take months to get a phone connection but of course if you knew someone who worked in the post office it was a different story.
‘Telecom’ wasn’t sold so the govt could reap the profit from sale, it was sold because the country was struggling to afford the continuous tax payers funds that were required to keep it going and to force a monopoly state provider to start operating in the best interest of something other than it’s own operational convenience.
Burt – good points. The old Post Office associated system was bad news.
What I would say is that publically owned operations do not need to be badly run, un-innovative or stagnant. (Of course, we know that private sector operations can be very badly run too). To me it is a question of leadership quality, focus and accountability (these are all factors you alluded to – and very properly – in your post), not whether or not you are a private sector or public sector enterprise.
My favourite example at the moment is Singapore Airlines, long long regarded as one of the most profitable, innovative and forward thinking airlines in the world: even though it is 54% owned by Temasek, the fully Singaporean Government owned sovereign fund.