Chairman Mark Verbiest told shareholders that any structural advantages Telecom had a few years ago are long gone while competition has grown.
Managing director Simon Moutter said the global revolution in telecommunications is hugely disrupting the business.
Mr Moutter said although there is enormous demand for Telecom services with both fixed and mobile data growing at around 100% year over year, it's sometimes difficult to turn that into good returns for shareholders.
He said Telecom staff are optimistic there is a brighter future ahead as the company implements programmes in line with a strategic rethink to be a retail service provider.
Mr Moutter said customers prefer to use online and on device methods of dealing with technology providers.
"To make the moves, the changes, to request plan upgrades, to seek their bills and all of those sorts of things online or right off their smartphone."
Mr Moutter said Telecom wants to alter its online capability over the next few years so that customers can do most of what they want themselves via the technology.
He said global experience suggests that it takes three to four years to turn around the financial performance of a telecommunications company and Telecom is already some way into that process.
While Telecom's sales, operating earnings and net profit were all down in the 12 months to June, Australia's Telstra lifted sales nearly 2%, grew operating profit nearly 4% and net profit nearly 13% in the same year.
