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Telecom Deal Boosts Alcatel's Revenues

Posted on: Tuesday, 19 October 2004, 12:00 CDT

ALCATEL New Zealand more than doubled its revenues to $88.5 million in 2003 from $39 million the previous year as its outsourcing deal with Telecom kicked in.

Profits dipped to $3.7 million from $5.35 million in 2002, when it was helped by a $1 million tax credit.

The wholly-owned subsidiary of the French telco equipment giant signed a deal with Telecom in June 2003 to manage its core fixed- line network and help build its Internet protocol-based "next generation" network.

The deal is worth $120 million over five years.

Alcatel New Zealand chief executive Andrew Fairgray says much of the increase in revenue can be attributed to the Telecom outsourcing agreement.

The deal only came into play during the second half of 2003 and Mr Fairgray indicates revenue growth will be strong this year.

Mr Fairgray says last year's result was also helped by the growth in broadband subscriber numbers. Alcatel supplies equipment to this market.

It also supplied more equipment to state-owned transmission company BCL, Mr Fairgray says.

"Our focus areas for growth are mobile, the overall services business and how we can leverage our economies of scale, and -- thirdly -- looking at providing end-to-end offerings in the corporate space."

Worldwide, Alcatel supplies everything from telecommunications to satellite and submarine equipment.

In New Zealand, its main business is providing core network infrastructure for telcos and modems and mobile phones.

Mr Fairgray says the mobile business is as solid "as it has been for the last four or five years".

The subsidiary added 200 ex-Telecom staff to its payroll thanks to the Telecom deal and now employs 322 people in total.

Source: Dominion Post

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