The ratings on Telecom Corp. of New Zealand Ltd. (TCNZ) reflect the company's strong business profile, which is underpinned by a prominent market position in the New Zealand market and expansion opportunities in the higher growth Australian market. The still-small size of TCNZ's Australian operations will require further capital investment to expand over the long term. Nevertheless, a moderately conservative financial profile provides some flexibility to fund additional Australian expansion, and to weather further economic downturns or an increasingly competitive New Zealand market without materially impacting credit-protection measures. TCNZ has demonstrated its commitment to restoring its financial profile, following the debt-financed AAPT acquisition in 2000, and subsequent industry downturn. The company has also successfully executed its strategy to focus on
