Despite a 59% drop in the profits, Telecom's share prices remained largely stable after the announcements of the results. This year the company registered a profit of $163 million, for the six months, as compared to $397 million in the previous year.

Telecom Chief Executive, Paul Reynolds, said that despite the slowing economy the company focused in the broadband, mobile and ICT areas and its revenue increased
0.4 percent to $2.84 billion. Its broadband and internet revenue rose $24m where as Gen-i, Telecom's information and communications technology operation for business customers, had revenue growth of $38m in IT services sector.

However it's mobile revenues fell $27m due to low pricing, increased data caps and reduction in the roaming revenues. Revenue of local service was down $5m, calling down $16m and resale down $18m.

Other factor affecting the revenues was the labour costs which rose to $468m, $31m higher than the previous in the first quarter, where as in the second quarter labour costs were lower than the previous year.

Measures taken by the company by controlling costs of the activities are showing good results with the net additions in mobile and broadband. Huge work has been done in Telecom, the new mobile network, fibre to the node broadband, fixed network transformation and operational separation.

Dr Reynold said, "We've got a big programme of work with regulators to get the right framework in place, and that's about clear recognition of cost of capital and having an acceptable rate of return on that capital. It's about bringing New Zealand up to international practice because we're quite different from best international practice in some of these areas."