Quantum effect hurts Spark profit

Spark's efforts to cut staff cost may help the company's long-term profitability, but investors face short-term pain. On Wednesday the company posted a net profit of $385 million for the year. That's down almost eight percent on the previous year's $418 million.

When the costs of the company's staff cuts and move to Agile working are not taken into account Spark's ebitda (earnings before interest, tax, depreciation and amortisation) was up 2.2 percent. Reported ebitda was down 2.7 percent at $989 million. Revenue for the year ticked up slightly by one percent to $3,649 million.

Voice revenue was down 12.7 percent for the year. That's a faster fall than Spark has seen in the past and suggests the move away from traditional services is accelerating. Spark saw strong growth in mobile with revenues up 6.9 percent. The two sectors effectively cancelled each other with voice revenue dropping $83 million while mobile revenue climbed by the same amount.

Mobile, broadband connections growing

Mobile connections are up 2.8 percent at 2.46 million while broadband connections are up 1.9 percent at 700,000.

There was a small decline in the company's broadband revenue as customers switched to lower cost fixed wireless broadband services. Spark's cloud, security and service management was up 15.1 percent.

In a message from the managing director and chairman attached to the annual report Spark says the "financial performance is on plan".

The Quantum programme appears to have begun paying off with Spark reporting a 6.7 percent decrease in labour costs.

Vocus NZ operation see profit climb

Being on the market for part of the year didn't stop Vocus Communications from turning in an impressive 2018 result. The business saw a four percent increase in revenue to $363.5 million with its enterprise division growing faster than the consumer operation. Ebitda is up eight percent on the year.

Vocus says the key reasons for the increased profit was growth in its wholesale business as well as success selling energy to consumer customers. It also reports growth in broadband customer numbers coming from churn.

The company reports a three percent increase in broadband customers with a rise in UFB connections outstripping the fall in copper connections. There was a slight fall in revenue per customer.

TeamTalk banks $4.4 million

TeamTalk says it made a $4.4 million profit in the year to June 30. That's down on the previous year's $5.1 million which was boosted by the sale of Farmside. Revenue held steady at a shade over $34 million. Earnings before interest, tax, depreciation and amortisation or ebitda was up 4.7 percent at $12.1 million.

Chief executive Andrew Miller says: “Over the last 12 months we have grown EBIT (earnings before interest), sold the remaining 30 percent in Farmside, secured a new banking partnership with BNZ and continued to reduce debt.”

Now TeamTalk has started rolling out a new nationwide digital radio network. The company says it will be finished by June 2019 when it will be the only national digital radio network in the country.

Miller says health and safety legislative changes and the Christchurch and Kaikoura earthquakes mean "organisations are now considering diversity across their communications portfolio and mobile radio is critical in providing this service".

"Unintentional billing errors" see Vodafone back in court

The Commerce Commission has laid ten charges against Vodafone after the carrier made "false representations in invoices sent to customers".

Charges were filed in the Auckland District Court under the Fair Trading Act. They cover a period from January 2012 to January 2017 when Vodafone overcharged customers who closed their broadband accounts. If they cancelled part-way through a month, they were sent an invoice for the entire next month.

The misrepresentation is because customers only owned Vodafone for the services used up until the agreed termination date.

The case is due to be heard in court on September 11.

Vodafone issued a statement from CEO Russell Stanners saying: “The billing errors in question were unintentional". The company says it looked to identify affected customers and either applied credits or issued refunds. It also says it didn't keep any of the money it got from the invoicing and donated the outstanding unclaimed amount to charity.

Earlier this year The Commerce Commission laid charges against Vodafone for its FibreX advertising.

TCF goes into bat for NZ telcos

The Telecommunications Forum (TCF) used its annual report to defend local telecommunications companies against criticism that complaints against them are unreasonably high.

It says the number of complaints per 10,000 connections made against New Zealand's telecommunications companies compares favourably with the counterparts in other countries. It says the industry also does well when compared to other local utility industries.

TCF CEO Geoff Thorn says: “We’re pleased the industry compares favourably to the UK, Australia and other industries".

Elsewhere the report points out how far telecommunications prices have fallen and how this compared with other utilities. And, again, Thorn makes the comparison between local performance and the rest of the world. He points out that New Zealand’s broadband plans cost between five and 15 percent less than the OECD average. While mobile calling plans are 27 to 47 percent cheaper here.

Thorn says later this year there will be a new set of regulations when the Telecommunications Act is updated. He says this will increase the focus on consumer matters and Commerce Commission industry oversight.

He says; "We’ve been busy developing new codes which will establish customer service standards, such as the Fibre Installation Code which establishes industry-wide processes to improve consumer experience with fibre installs."

Australia pulls plug on Huawei, ZTE 5G

Australia's Federal Government managed to remain functioning long enough on Thursday to ban Chinese equipment suppliers from supplying 5G networks. The move effectively rules out Huawei and ZTE from lucrative next generation mobile contracts.

Scott Morrison, the acting home affairs minister Scott Morrison and comms minister Mitch Fifield, who has since resigned, issued a press release. It says the government has found no combination of technical security controls that sufficiently mitigate the risks of sensitive processes being intercepted at the edge.

Later it says: "The government considers that the involvement of vendors who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law, may risk failure by the carrier to adequately protect a 5G network from unauthorised access or interference."