10 May 2009

Telecom profit falls 40%

9:48 am on 10 May 2009

Telecom's profit fell by 40% in the nine months to March, as it experienced tougher competition and lower margins.

The company made $322 million in the period, compared with $537 million in the same period a year ago.

It says the slowdown in the economy knocked $30 million off its profit during the period.

However, Telecom still expects to make a profit of between $460 million to $500 million in the full year. It will pay a dividend of 6 cents per share, compared with 7 cents per share last year.

Telecom settled a legal dispute with its rival Vodafone over mobile services on Thursday.

Telecom says it lost 11,000 mobile customers in the third quarter and expects competition to be even tougher when it launches its new XT mobile network at the end of May.