Strong market position as New Zealand's incumbent full-service telecommunications provider Strong operating-cash-flow generation Commitment to moderately conservative financial policies Evolving earnings mix toward more competitive products and services Regulatory-imposed operational separation that encourages competition and lower prices Execution risks associated with the group's transformation program The ratings on Telecom Corp. of New Zealand Ltd. (TCNZ) primarily reflect our opinion of the group's strong market position as the incumbent provider of full-line telecommunications services in New Zealand. Also underpinning the ratings is TCNZ's strong underlying cash-flow generation and commitment to maintaining a conservative financial profile. These strengths are partly offset by the operational, technological, financial, and competitive challenges posed by the group's transformation program; the regulatory-enforced operational separation of its network
