BCL to cut up to 30 jobs

7.45pm - By ADAM GIFFORD

Television New Zealand subsidiary Broadcast Communication Ltd is blaming the slow progress in the Government's Probe project to get broadband services out to the regions as one of the factors leading it to lay off up to 30 people.

But managing director Geoff Lawson said the company is still committed to expanding its telecommunications activities, despite the sluggishness of the telecommunications market.

"To ensure BCL remains in a sound financial position it makes good sense to review our operations so that we can continue to be New Zealand's premier wholesale wireless solutions provider," Lawson said.

Staff have been told between 20 and 30 of BCL's 319 positions are under review, which will result in some staff being made redundant and others redeployed. Lawson said the company is going through a 28 day consultation period with staff.

BCL spokeswoman Sue Hamilton said the redundancies won't include people working on the broadband project, but are more likely to come from the network and design and build areas.

"It is more a case of looking for where we can trim to create cost savings while ensuring the existing level of services continues," Hamilton said.

"This is late in coming. Other companies have already gone through that pain."

A competitor in broadband, Walker Wireless, shed staff earlier this year because of delays in technology being ready for market.

Hamilton said BCL is continuing to spend money with technology supplier Ericsson to roll out an IP (internet protocol) overlay on its backbone networks, but returns are slower than expected.

"With the delays in Probe and the results of the RFP now not due until late January, things keep slipping," she said.

Hamilton said while BCL in a consortium with Telecom missed out on the contract to supply broadband services in Southland, it expects to pick up some of the regions through the Probe process.

"We went with a number of parties to Probe so all our eggs are not in one basket," she said.

During the year to June 30 revenues from TVNZ's transmission businesses, which includes both BCL and TVNZ Australia, dropped $19.9 million to $114.5 million while net after tax profit dropped $7.9 million to $14.2 million.

While revenue from analogue transmission services dropped $10 million because of renegotiated contracts with Sky Television and TVNZ, revenue from telecommunications services increased to 22 percent of total revenues compared with 18 percent in the previous year.

BCL picked up a contract with United Networks to provide telecommunications links between Auckland and Wellington. It is also providing linking circuits for both TelstraClear and the Radio Network into Gisborne.

During the year BCL won a contract with Sky Television to provide linking services from sports venues throughout New Zealand, extended video linking business from the TAB and renewed transmission and linking contracts with major radio customers.

It is providing the transmission for Prime Television's expansion into Taranaki, Eastern Bay of Plenty and Wairarapa.

Internationally, it won contracts Papua New Guinea, Macau and Fiji. The Papua New Guinea project is currently underway and involves a substantial upgrade of aeronautical communications systems in the country, funded by the Australian aid agency AusAid.

The company's business with Vodafone expanded during the year, with BCL providing site co-location services in provincial areas, extending Vodafone's coverage reach, as well as providing additional transmission linking services.