Ann: GENERAL: TEL: Completion of first stage of m

• Release Date: 26/05/14 16:59
• Summary: GENERAL: TEL: Completion of first stage of major reengineering programme
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					TEL
26/05/2014 14:59
GENERAL

REL: 1459 HRS Telecom Corporation of New Zealand Limited

GENERAL: TEL: Completion of first stage of major reengineering programme

Market Release

26 May 2014

TELECOM COMPLETES FIRST STAGE OF MAJOR REENGINEERING PROGRAMME

Telecom announced today it has successfully implemented over the last week
the first stage of its programme to reengineer and update key customer
service IT platforms.

Telecom Chief Executive, Simon Moutter, said, "This major IT reengineering
programme has been nearly two years in the making and has been completed
on-time and on-budget, with only minor post-implementation corrections now
required.

"The reengineering programme is a significant driver of our long-term
strategy. It heralds a profound change for the business by bringing the
customer rather than the copper wire connection to the centre of our IT
systems architecture for the first time in our 100 year history.

"The first stage of reengineering has delivered major improvements to our
foundation system capabilities and to our prepaid mobile customer systems, as
well as to some customer facing systems including a brand new website. The
foundation capabilities, including the introduction of a best-in-class CRM,
provide a solid platform for future stages in the programme.

"This first stage implementation, costing around $70 million to date,
affected more than 120 major IT systems and took more than 430 person years
of work to deliver. Implementation over the weekend of 17 and 18 May went
very smoothly, albeit switching on the new systems had to be delayed by 12
hours when last Monday, as Murphy's Law would have it, we experienced an
unrelated hardware fault on our internal IT network."

Successive stages will expand to post-paid mobile and broadband and will
continue to improve the customer experience and provide for more efficient
customer service operations. The next major stage of the reengineering
programme is due to be completed in the FY15 financial year, with the
emphasis on post-paid mobile and building on the foundation laid in the first
stage.

Mr Moutter added, "In addition to our good progress in reengineering, we are
encouraged by improving operating momentum in Telecom Retail and the
continued repositioning of Gen-i towards Cloud services, mobility and managed
ICT.

"The change of our name and core brand to Spark, scheduled to take place in
August, is also on-track. Changing our name is an exciting next step in our
strategy. It reflects the enormous change that has already occurred and
provides a catalyst to a new approach for our business.

"We've evolved to a company that is leaner, faster and bolder - all necessary
to win in a dynamic and competitive digital services market where earning
customer preference is everything.

"We are well on track to meet our FY14 guidance. Our full year guidance for
adjusted EBITDA from continuing operations remains unchanged at $925 million
to $945 million, excluding the one-off AAPT sale proceeds and rebranding
costs. As noted at the half year, our intention is to pay a minimum dividend
of 16 cps for the FY14 year."

- ENDS -

For media queries, please contact:
Richard Llewellyn
Head of Corporate Communications
+64 (0) 27 523 2362

For investor relations queries, please contact:
Mark Laing
General Manager Corporate Finance
+64 (0) 27 227 5890
End CA:00250886 For:TEL    Type:GENERAL    Time:2014-05-26 14:59:35