Products of Vodafone NZ Limited

weightwelloffMobile - Wireless

Dec 13, 2013 (3 years and 8 months ago)

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Products of Vodafone NZ Limited

Sr. No

Product Description

Price ( NZ $)

1

Apple i
Phone
-
16GB ( 24 Months Term)

$99.00
/Month

2

Procare Multi Cleaning Kit

$
19.95

3

Micro SIM to Standard SIM Adaptor

$
4.99

Source: Vodafone New Zealand Ltd, 2013


Services Provided by Vodafone

NZ Limited

Sr. No

Service Description

Price ( NZ $)

1

Home phone and Calling ( 12 Months Term)

$
50 / Month

2

Naked Broadband plans, 150 GB (12 months terms )

$99.00/ Month

Source: Vodafone New Zealand Ltd, 2013


Products of Telecom NZ Limited

Sr. No

Product Description

Price ( NZ $)

1

Apple i
Phone
-
16 GB ( 24 months Terms)

$139.00/ Month

2

Nokia

Lumia 1020 (24 months terms)

$149.00 Upfront

139.00/ Months

3

New Sim Card

$
5.00

Source:
Telecom New Zealand

Ltd,

2013


Services Provided by Telecom NZ Limited

Sr. No

Service Description

Price ( NZ $)

1

Home Phone & Everyday Local


calling

$
46

/ Month

2

ADSL Broadband plans (30GB)

$75
.00/ Month

Source: Telecom New Zealand Ltd, 2013


Profit and Loss in NZ $ M

Company

2008

2009

2010

2011

2012

Vodafone NZ Ltd.


191.5

177.7

121.6

151.5

175

Telecom NZ Ltd.

713

400

382

166

1157

Source: Business. Govt. NZ, 2013

Telecom NZ Ltd., 2013

(Annual Financial Statements are
attached)



Graphically Presentation of Profit and Loss (2008
-
2012)
in NZ $ M


Source: Business. Govt. NZ, 2013

Telecom NZ Ltd., 2013

(Annual Financial Statements are attached)






0
200
400
600
800
1000
1200
1400
2008
2009
2010
2011
2012
Vodafone
Telecom
Critical Analysis (2008
-
2012)

As I went through all the reports for both companies, Vodafone New Zealand Limited and
Telecom New Zealand
Limited
, I

found some key points related to their financial performance.

I am going to convey these findings out as following
:



Vodafone NZ Ltd. And
Telecom NZ Ltd

2008
:

Telecom NZ Limited

Telecom NZ Limited

had a profit after tax of NZ $713

(M)

in the year 2008
. There were major artifacts
behind the profit that Telecom NZ Limited made in this year.

One of them was establishment an
d
launching of Chorus (access network business unit). In April 2008
Telecom disclosed the

transformation
strategy, which
had primary focus on developing customer preference in the key areas such as mobile,
broadband and ICT, and protecting their traditiona
l revenue streams. Besides this significant investments
were made for the long term health of the business. Telecom NZ Limited upgraded fibre
-
to
-
the
-
node
upgrades in Auckland in this year and setup first nationwide network of roadside cabinets. Telecom
pro
vided a very crucial role in ensuring that New Zealanders get access to affordable and dependable
technology through this programme.

Gen
-
i was a growing business in year 2008 and was a major area of
strength as well. Telecom had around a 12% share of the I
T market in New Zealand with revenue and a
high success rate in winning new business.


Vodafone NZ Ltd.

In year 2008, Vodafone NZ Ltd.’s profit was NZ $191.5 (M).

Vodafone NZ Ltd made high profits from
iPhone sales

(Vodafone was the first to offer iPhone in New Zealand market)
and from
extension of
sponsorship from the Warriors

(Rugby team). The profit was also gained from best possible utilization of
the available resources at the time. The asset turnover ratio of V
odafone NZ Ltd.
(163%)
was higher if
compared to that of Telecom’
s in year 2008. Vodafone NZ Ltd. exceeded in utilization of the investment
made in the assets in much better way than Telecom NZ Limited. Vodafone also did really well with
higher return on c
apital employed with 17.80% as compared to Telecom NZ Limited, since Vodafone had
invested the available capital in more productive uses and therefore received higher return on it.


Vodafone N
Z Ltd. And Telecom NZ Ltd

2009
:


Telecom NZ Limited

In year
2009, Telecom made a profit of NZ $400

(M)
, which had declined as compared to year 2008. The
operating profit margin, return on capital employed, and asset turnover ratio had also declined as
compared to the previous year
. The l
ikely reasons behind this do
wnfall
were
:



Launch of XT Mobile Network, which was a huge investment to expand the capacity and
footprint.



Tax increase



Recession



Drastic increase in depreciation and amortization because of high level of capital expenditure



Write
-
down of redundant assets



Increase in net finance expense because of the cash returned to shareholders in 2008.


Vodafone NZ Ltd.

In year 2009, Vodafone NZ Ltd. had a decline in profit after tax with NZ $177.7 (M), as compared to the
previous year’s profit.

In 2009, Vodafone provided the customers with new deals such as SKY customers
who chose Vodafone for their landline and broadband received MY SKI HDi for no extra costs.
The
likely reasons that caused this decline in profit were:



Higher cost of production



Lower volume of sales



Investment of capital and other financial resou
rces in an unproductive manner



Extension of sponsorship for Vodafone Warriors for another four years i.e. total of 16 years of
sponsorship.


Voda
fone NZ Ltd. And Telecom NZ Ltd

2010
:


T
elecom NZ Limited

In year 2010, declining tendency continued with profit after tax had dropped to NZ $382 (M). It was just
a minor decline in comparison to the previous year. The likely reasons behind this decline were:



5 million paid out in compensation t
o the customers



Chorus became operationally separate business unit managing Telecom’s local access network in
New Zealand.



Telecom Wholesale became the operationally separate business unit that delivered wholesale
products to service providers throughout
New Zealand.



There was an increase in cost of goods sold as compared to the higher sales price



There was higher costs of goods sold which effected the profit



Price
-
based competition continued to increase in the wholesale managed data market with
alternativ
e infrastructure providers viewing to make the most of the returns on network
investments.



Vodafone NZ Ltd.

In year 2010, Vodafone NZ Ltd. continued with a descending trend of profit after tax with NZ $ 121.6
(M)

even after Vodafone was the first one to demonstrate LTE (4G) services in New Zealand
. Few likely
reasons that gave decline to company’s profit were:



Increase in operating and administrative expenses



Retail
outlets

increased to 800 in New Zealand



Increas
e in the cost of raw material



Volume of the calls dropped



Increase in the liabilities which affected the return on capital employed



Purchase of First mobile



Invested in services like
providing customers with Blacklist ability
-

the power to decide who
could

send then TXT and PXT messages.



Invested in the launch of My Vodafone iOS application


Vodafone N
Z Ltd. And Telecom NZ Ltd

2011
:


Telecom NZ Limited

In year 2011 the profit after tax was the lowest with NZ $166 (M), therefore this year was considered as
o
ne of the most drastic year in the five years history of Telecom NZ Limited.
Immediate work was
required in the key profitability areas in order to sustain the industry. Company’s sustainability and
existence was at stake in the event if company failed to
take some immediate remedial actions.
The likely
reasons behind this decline were:



Impairments to write
-
off copper based assets



Christchurch earthquake



Costs of production could not be recovered



High operating and administrative expenses



Inefficient
management


Vodafone NZ Ltd.

In year 2011, the profit after ta
x for Vodafone NZ Ltd. increased

to NZ $151.5 (M) as compared to last
year.

There was also an increase in operating profit margin and return on capital employed. The likely
reasons behind this increase were:



Higher operating efficiency



Customer count for Vodafone NZ touched 2.5 million



Reduced cost of production



Strong managerial

aptitude



Entered a joint venture with Telecom to expand government’s rural broadband initiative, which
aimed to bring broadband to rural New Zealanders



Signed
-
up with Pacific Fibre (building a new undersea cable system to link New Zealand with
rest of the

world)



Launch of

new app

Vodafone Guardian
”. This app helps parents keep their kids safe from
unwanted calls, TXT messages and inappropriate use of smartphones.



New version of My Vodafone launched especially for Android users


Vodafone NZ Ltd. And Teleco
m NZ Ltd 2012
:


Telecom NZ Limited

Year 2012 had brought major transformation and revolution in Telecom NZ Limited as profit of the
company jumped to NZ $1157 (M). This was the highest profit in comparison with Telecom’s history of
past four years. The rea
sons behind this increase were:



Demerger of Chorus and Telecom
-

providing copper and fibre network to local telephone
exchanges



Post
-
Demerger, Telecom retained its focus on winning in the major markets of mobile, broadband
and ICT.



Ultra
-
fast fibre

optic broadband became more widely available, and next generation ‘4G’ mobile
services were likely to

arise in New Zealand.



Customer preference provided Telecom with a concrete foundation to supply for both their
customers and shareholders.



Improved produ
cts and services offered to customers



Improved efficiency and effectiveness to deliver returns to the stakeholders



Improved cost cutting strategies


Vodafone NZ Ltd.



In year 2012 the profit after tax of Vodafone NZ Ltd had increased and touched NZ $175 (M).
The likely reasons behind this increase in profit were:



Vodafone DriveSafe launched a free service to help New Zealanders stop TXT
messaging while driving.



Improve
ment in all the areas of concern



Enhancement in operating efficiency solutions



Planned and more structured management



Launched Data Angel, which gave customers full control of their data usage



New services such as : Pay bills and top up prepay on Facebook

References


Business. Govt. NZ (2013) Companies Office.
VODAFONE NEW ZEALAND LIMITED
(927212) Registered


Retrieved September 19, 2013 from Web site:


http://www.business.govt.nz/companies/app/ui/pages/c
ompanies/927212/documents?ba
ckurl=%2Fcompanies%2Fapp%2Fui%2Fpages%2Fcompanies%2Fsearch%3Fmode%3
Dstandard%26type%3Dentities%26q%3Dvodafone


Telecom New Zealand Ltd (2013) Personal
. i Phone 16 GB.


Retrieved September 19, 2013 from Web site:


http://store.telecom.co.nz/mobile/personal/phone
-
details/iphone5
-
white
-
16gb/


Telecom New Zealand Ltd (2013) Personal. Mobile Phones
-
Our Picks


Retrieved September 19, 2013 from

Web site:


http://store.telecom.co.nz/mobile/personal/phones


Telecom New Zealand Ltd (2013) Personal.
Home phone
-

our plans and prices.


Retrieved September 19, 2013 from Web site:


http://www.telecom.co.nz/phoneline/phoneline/plansandpricing/#p46?lpid=link_46_hpel
c

Telecom New Zealand Ltd (2013) Personal
.
Introducing Telecom Home P
hone and Broadband
Packages.
Retrieved September 19, 2013 from Web site:


http://www.telecom.co.nz/packages/?nid=mm339


Telecom New Zealand Ltd (2013)
Telecom.
Annual Reports


Retrieved September

19, 2013 from Web site:


http://investor.telecom.co.nz/phoenix.zhtml?c=91956&p=irol
-
reportsannualhist


Vodafone New
Zealand Ltd (2013
). Personal
.
Apple i

Phone 16 GB



Retrieved September 19, 2013 from Web site:


https://www.vodafone.co.nz/shop/mobileDetails.jsp?skuId=sku30190044


Vodafone New Zealand Ltd (2013).
Personal.

Hands free accessories.


Retrieved September 19, 2013 from Web site:

http://www.vodafone.co.nz/shop/accessoryListing.jsp?&
reset=true&categoryId=cat7000
4&men uKey=mnit700043


Vodafone New Zealand Ltd (2013).
Personal
.
Home Phone Plans


Retrieved September 19, 2013 from Web site:


http://www.vodafone.co.nz/home
-
phone/plans/


Vodafone New Zealand Ltd (2013). Personal.
Naked Broadband
.


Retrieved September 19, 2013 from Web site:


http://www.vodafone.co.nz/naked
-
broadband/

Vod
afone New Zealand Ltd


Annual Reports

http://www.vodafone.com/content/index/investors/investor_information/annual_report.html


Vodafone yearly
information:

http://www.vodafone.co.nz/about/