Kordia in discussions with Crown over its future
State owned telecommunications company Kordia is undergoing a strategic review
By Sarah Putt, Auckland | Wednesday, 1 August, 2012
State owned telecommunications company Kordia is undergoing a strategic review, with the findings expected to be made public later this year.
CEO Geoff Hunt said he would not comment publicly on the review until it was “bedded in” with management and staff, a process which is not expected to be completed until September.
Kordia, originally the transmission arm of Television New Zealand, became a state owned enterprise in 2003. In 2006 it embarked on a “broadcast to broadband” strategy as its primary income was under threat with the switch off of analogue television, due for completion in 2013.
As part of this strategy Kordia embarked on a plan to build a trans-Tasman cable in a project called OptiKor. In January Kordia announced that Axin and Huawei Marine (two Chinese-owned technology companies) are now leading the project.
Kordia also bought the internet service provider Orcon in 2007 for $24.3 million. Orcon is the first of the five largest ISPs in New Zealand to launch Ultra Fast Broadband services. According to Kordia’s half year results to December 2011, Orcon’s VoIP product Genius (which is UFB enabled) achieved its full year sales targets in just two months.
The half year results also show Kordia achieved a net profit after tax of $7.3 million, compared to a loss in the same period last year of $18.01 million. Kordia declared an interim dividend of $1 million in February and has forecast a total dividend of $2 million at the end of the financial year.
The half year results note that 60 percent of Kordia’s revenue is being derived from services that did not exist five years ago.
Kordia board member Rhoda Phillippo says the SOE is in discussions with the Crown about the strategic future of Kordia.
“From our perspective making the right decision in the telecommunications/ISP market, you have to be very aware of the economic environment both in Australia and New Zealand,” she says.
“It’s not just strategically reviewing the business and analogue switch off, it’s reviewing what context you are in, who’s changing, who’s moving and shaping and where would you fit into it. I think it will be carefully considered. There’s no rush to sell off the crown jewels in any way shape or form, (it’s) much more a board deciding strategically what is the right move for Kordia in the future.”