Telecom New Zealand's Fiscal 2013 Result in Line as Broadband Market Share Steadies

Telecom New Zealand's fiscal 2013 result was in line with expectations and there is no change to our long term view on the company. The launch of its 4G network, improved offering in corporate IT services and investments in backhaul infrastructure are key initiatives for Telecom in fiscal 2014. We expect revenue to stabilise in fiscal 2014 as these strategies gain traction. Our forecasts are under review and fair value is unlikely to change materially. Our narrow economic moat rating remains. Telecom New Zealand's mobile network enjoys efficient scale, with its and Vodafone's dominant positions in the mature New Zealand market acting as a barrier to entry for new entrants.