Ann: GENERAL: TEL: Telecom announces change in fo

• Release Date: 13/03/13 14:09
• Summary: GENERAL: TEL: Telecom announces change in focus for Gen-i Australia
• Price Sensitive: No
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TEL
13/03/2013 12:09
GENERAL

REL: 1209 HRS Telecom Corporation of New Zealand Limited

GENERAL: TEL: Telecom announces change in focus for Gen-i Australia

STOCK EXCHANGE ANNOUNCEMENT

13 March 2013

TELECOM ANNOUNCES CHANGE IN FOCUS FOR GEN-I AUSTRALIA

Telecom said today it has undertaken a strategic review of the Australian
operations of its ICT services unit, Gen-i, which will result in a
significant change in focus for Gen-i Australia.

Gen-i Australia will now concentrate on supporting large corporate customers
(based either in New Zealand or Australia) with specific trans-Tasman ICT
services requirements. It will be exiting from other customer activities
which fall outside this refined business focus.

As a result of these changes, total staff numbers at Gen-i Australia will
fall from approximately 180 to about 60 employees. In addition to redundancy
costs, it is anticipated there will be other restructuring costs associated
with this action.

Where feasible, Gen-i Australia will look to transfer some customer
activities across to AAPT, a wholly-owned Telecom subsidiary and Australia's
largest business-only telecommunications network provider.

As previously announced, Telecom group expects to recognise a material
one-off charge in the second half of the current financial year (FY13), as it
implements a strategic shift to a future-oriented, competitive provider of
communication, entertainment and IT services delivered over its networks and
the Cloud.  Costs associated with Gen-i Australia will be included in this
charge, which is excluded from the group's stated guidance for FY13 of
adjusted EBITDA in the range $1,040 - $1,060 million.

Tim Miles, Gen-i CEO, commented: "Gen-i Australia was originally set up about
13 years ago to serve the trans-Tasman needs of existing corporate customers.
Over the years, it has broadened its activities within the Australian ICT
services market - but we have never had the scale to compete effectively in
these other market segments.

"We believe the time is right to return to Gen-i Australia's core purpose and
renew our focus on trans-Tasman ICT services - an area where we have a strong
track record of success, proven capabilities, an excellent roster of
corporate customers, and the necessary scale to compete effectively.

"The trans-Tasman market has good growth potential as the New Zealand and
Australian economies grow closer together, facilitated by improved data
connectivity. Nowadays, around 40% of New Zealand's international internet
traffic is between Australia and New Zealand, versus just 10% in 2000, and
the construction of data centres is a growth industry in both countries. This
trend is set to continue with initiatives such as the proposed Tasman Global
Access telecommunications cable, in which Telecom intends to be a key
investor."

- Ends -

For media queries, please contact:
Andrew Pirie
GM Corporate Relations
Telecom New Zealand
+64 (0) 27 555 0275

For investor queries, please contact:
Mark Laing
GM Capital Markets & Investor Relations
Telecom New Zealand
+64 (0) 27 227 5890
End CA:00234079 For:TEL    Type:GENERAL    Time:2013-03-13 12:09:04