11 May 2009

Telecom warns customers not to expect price war

7:45 am on 11 May 2009

Telecom says its customers should not expect it to enter a price war with its rival Vodafone when it launches its new mobile phone network at the end of the month.

Telecom says it is pre-selling its new mobile services to business and retail customers, in anticipation of its launch, delayed from 13 May to the end of the month.

Chief executive Paul Reynolds says competition will be tough, and the company will aggressively try to claw back customers after losing 11,000 customers in the third quarter, but it will not be a price war.

The company has maintained its profit outlook for the full year, between $460 and $500 million, a fall from the $713 million it made last year.

Telecom's profit plunged 40% to $322 million in the nine months to the end of March, due to tougher competition and lower margins.

The company reached an out of court settlement with Vodafone last week, ending a legal row over mobile services.