Bargain hunters arrest Telecom share slide

Telecom shares lost 6c during yesterday's trading in the wake of ongoing woes with the XT mobile network before bargain hunters stepped in.

Trading volumes were highest as shares in the beleaguered telco touched $2.24 during the day before lifting 6c to close at $2.32.

Forsyth Barr institutional broker David Price said the company was facing headwinds in the form of the damage caused by the mobile network failure as well as impending decisions on mobile termination rates and the allocation of contracts for the Government's fibre roll-out.

Mobile services, particularly the high-speed mobile data offered by XT, were seen as one of thegrowth areas for Telecom.

"This was going to be their killer product," Price said.

But he said business customers in particular would be taking a wait-and-see approach before committing to XT, regardless of sweeteners.

"They've got to stem the bleeding. It's coming from all directions whether it's regulatory or their own doing. The news, unfortunately for them, has all been negative."

ASB Securities adviser Stephen Wright said that while there had been some weakness in the Telecom share price, the market had taken the XT problems in its stride.

He said the fact that it had not fallen further could be attributed to a coming 6c dividend payment.