The ratings on Telecom Corp. of New Zealand Ltd. (TCNZ) reflect its moderately aggressive financial profile and increased debt usage in the past two years, resulting in below-average credit protection measures and strong competition, particularly in Australia where TCNZ is a small player. These factors are offset by TCNZ's strong business profile, prominent market position in the New Zealand (NZ) market, and expansion opportunities in the higher growth Australian market. TCNZ is committed to restoring its financial profile. In 2002, the company demonstrated its strategy to focus on investment returns, lifting free operating cash flows, cutting back on capital expenditure, reducing operating expenses, and actively targeting higher margin customers through changes in its pricing structure. Standard & Poor's expects funds
