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Current as of 02/10/14 07:40PM NZST

Hamish Fletcher

Business reporter for the NZ Herald

Telecom changing name to Spark

Telecom intends to change its name later this year to Spark, the company said as it announced flat net profit of $167 million for the 6 months ending 31 December 2013.

Company chief executive Simon Moutter said "Spark better reflects the company's new direction and the aspirations it has for its place in the life of New Zealanders".

"As a company we've moved far beyond the home telephone. Spark better represents what we are today - it is all about digital services, fibre, mobile, data, cloud, entertainment, apps, or whatever new technology is around the corner," he said.

Telecom spokesman Richard Llewellyn said the estimated cost of the rebrand was $20 million, which would largely be spent on changing signs.

"As you can imagine there is quite a lot of signage," he said.

Telecommunications consultant Jonathan Brewer described the name change on Twitter as "insanity". "They stand to lose a generation of customers who have never known anything but Telecom."

Sport New Zealand, the government organisation formerly known as SPARC, said they were consulted over Telecom's re-branding decision and the all-clear was given.

"They had engaged with us about seeking our views on Spark and we're fine with it, especially with the fact that it's with a `k' and we're Sport New Zealand now," spokesman Greg Palmer said.

Sport NZ didn't interact directly with consumers, but instead national and regional sporting organisations who were "well aware" of the re-branding, Mr Palmer said.

"Previously, under SPARC there was more social marketing with the likes of push play and that, but now we're not really in that space."

Telecom also announced this morning it was moving into the internet TV market, with what it describes as "a standalone and high-quality internet TV brand, ShowmeTV," which will launch later this year.

"The upcoming launch of ShowmeTV offers all New Zealanders an exciting new choice about how to get their home entertainment, which we think represents the future of how people will access content. It's a great example of how this company is changing by delivering the sorts of new services our customers want," said Moutter.

Earlier this month, Sky TV announced it was cutting ties with Telecom, agreeing to end a resale agreement which saw Sky's television service sold in a bundle with Telecom's phone services.

Last year, Telecom entered into a distribution deal with a web-based broadcaster to play English Premier League football matches.

See a Telecom provided timeline showing the history of the company and its name changes over the years:


Communications and Information Technology Minister Amy Adams welcomed the news that Telecom will launch its new internet-delivered television and movie service.

"This is one of the early signs that the market understands the new opportunities that will be available under the Ultra-Fast Broadband Initiative," said Adams.

"These are exciting times as New Zealand's enhanced connectivity through UFB, the Rural Broadband Initiative and fourth-generation mobile technology changes and challenges existing approaches. It brings considerable opportunities for new offerings in many areas."

Adams said it fell on industry to take the lead in some areas, including developing and promoting new services to business and consumers.

"The Government is playing an important role in the roll-out of faster broadband but we cannot, and should not, be dictating how use evolves.

"The market is evolving rapidly and throwing up exciting challenges. Those who grab them early are likely to flourish."

Telecom's Moutter said the company was "operating at a faster pace than in the past and we have to appeal to a broader range of customers in a competitive market place. Our successful initiatives in 4G mobile, fibre, WiFi, cloud services and applications have given us new momentum."

"When we embarked on this journey, we knew that at some point we would likely move beyond the Telecom name - to something that better reflects what our customers expect from us. Last year we gave our mass-market brand a colour and style refresh to reflect the changes we had already made as a business - and customers have responded positively.

Until the name change takes place later this year, the company will continue to trade as Telecom and Gen-i.

See details of the name change here.

See more of the company's financial results here.

Spark Digital Solutions will be the new name for Gen-i, providing solutions for the rapidly evolving needs of business, enterprise and government clients as they meet the demands of an increasingly globalised, connected and mobile customer base.

Spark Ventures will be the new name for Telecom Digital Ventures and will be focused on accelerating the company's future focus, delivering connected digital experiences that customers love and applications such as Smart Data analytics that will power tomorrow's successful businesses.

- Telecom announced a flat net profit for the half year of $167 million, up 2.5 per cent on the same period in 2012.

Profit excluding discontinued operations was $147 million, down 12.5 per cent on period for the year before.

Revenue for the six months was from continuing operations declined 3.0 per cent to $1.8 billion million, largely attributable to a 9.2 per cent decline in fixed line revenues.

Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) from continuing operations were down 5.8 per cent.

The net profit, although flat, is slightly higher than two analysts were predicting.
Forsyth Barr analyst Blair Galpin was predicting Telecom would reveal a net profit after tax for the six months to December of about $165 million.

A Goldman Sachs research note published last Friday put the company's adjusted net profit at $154 million.

First NZ Capital Greg Main predicted net profit at $172 million for period.

Telecom's total mobile connections jumped up 108,000 over the six months, which means the company now has around 1.9 million customers in this market.

Mobile market as at 31 December 2013

Telecom: 1.9 million
Vodafone: 2.32 million
2degrees: 1 million (on the last update the company gave)

- NZ Herald

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