It has also set itself up for the future with a couple of savvy deals relationships with Microsoft and Hutchinson Whampoa. This result and recent announcements offer hope that Managing Director Theresa Gattung is holding her own in a demanding job and that TEL is moving further down the past towards reinventing itself as high-growth technology company rather than a sluggish telco utility. Telecom goes into Sky. TEL wants to move away from boring old telephone calls and into online, wireless and other forms of communication. Whether the SKY investment is a wise one remains to be seen although I am inclined to side with the sellers, Tappenden Holdings, which is owned by some of New Zealand s smartest and wealthiest businessmen, Trevor Farmer and Alan Gibbs.
Telecom dials up mixed result.
The gap between revenue and profit partly reflects the acquisition of Australia s AAPT, which still needs to be bedded in before anticipated benefits emerge. However, profits from a lot of its core businesses are proving hard to sustain in the face of competition. An investment in TEL means backing a high-growth strategy that has yet to pay off. There are risks associated with this but, as I commented recently, the company looks reasonably priced at present and is offering an attractive yield to boot. McEwen s Investment Report 30 Aug 00 Telecom Corporation appears to be in an unstoppable decline at present.