Telecom’s profit

Telecom has just published their second set of regulatory accounts, which breaks down their income, expenses and profit between different sections. The 2010 historical cost accounts show:

• Access Services (Chorus) – a profit of $571m on revenue of $1,059m, so profit is 54% of revenue
• Wholesale Services – a loss of $10m on revenue of $925m, so profit is -1% of revenue
• Retail Services – a profit of $143m on revenue of $3,301m, so profit is 4% of revenue

This shows that basically even Telecom Wholesale struggles to make a profit because the charges from Chorus are so high.

This is why structural separation will be a good thing (if done properly), as Telecom will have to compete for its profit, not just use the monopoly infrastructure to get it.