February 20, 2018 / 8:21 PM / 3 months ago

UPDATE 1-Spark NZ's half-year profit falls amid tough mobile competition

(Adds comment and background)

Feb 21 (Reuters) - New Zealand’s biggest telecommunications and internet provider Spark New Zealand Ltd said on Wednesday first half net profit fell about 3 percent as it experienced fierce competition in the mobile market.

Net profit was NZ$172 million ($126.30 million) for the six months to Dec. 31, it said, compared to NZ$178 million a year ago. Analysts at Morgan Stanley had forecast an interim profit of NZ$174 million.

The company declared a total interim dividend of 12.5 New Zealand cents per share, made up of an ordinary dividend of 11 cents and a special dividend of 1.5 cents.

Like traditional telecoms providers around the world, Spark faces the challenge of shifting its fixed-line broadband business to the growth industries of mobile phones and wireless internet.

“We are considering accelerating our business transformation to strengthen the FY19 result. No decision has yet been made, but if the programme is accelerated, then FY18 guidance may reduce due to the associated costs of change,” the company said.

Spark said revenue from its broadband services fell about 1 percent to NZ$341 million.

Spark said in December its plans for a fifth-generation network (5G) were progressing well and it expected to roll it out within the “next few years.”

Revenue from the mobile phone services business rose 8 percent to NZ$635 million in the six-month period.

$1 = 1.3618 New Zealand dollars Reporting by Sumeet Gaikwad in Bengaluru; Editing by Byron Kaye and Edmund Blair

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