By Lilia Guan
23 April 2008 02:31PM
Tags: cellnet | face | 148m | loss | telecom | nz | contract | ends

Australian broad-based distributor Cellnet Limited has renewed its logistical and distribution deal with Telecom NZ until October. However, once the contract ends, Telecom NZ will not renew its business with Cellnet, forcing the distributor to face a possible decrease in annual revenue of $148 million and a possible reduction in annual net profit of $1.25 million after tax.

Stephen Harrison, managing director at Cellnet told CRN the renewed contract is part of a transitional arrangement until the launch of Telecom NZ’s WCDMA/GSM network, due to be rolled out in November. At that point Telecom NZ will not renew its contract with Cellnet any further.

“The loss of Telecom NZ won’t be a big issue for the Australian business. However it will be a huge gap for its New Zealand market. It won’t affect our Australian business at all,” he said. “The dent in revenue will affect our financial forecast for 2009. However you never know in this market and we will endeavour to fill the hole before then.”

Harrison told CRN the original contract with Telecom NZ was signed ten years ago and was for the procurement and delivery of mobile handsets for the New Zealand market.

“With the closure of Telecom NZ’s CDMA network, those mobile phones will not be needed. At the moment we are looking at various ways we can plug that hole through distribution of IT products and we are also in discussion about looking at distributing GSM mobile products – but for now it’s just one step at a time,” he said.

Recently, Cellnet promoted Aidan Fitzgerald to the newly created role of general manager of IT sales just four months after Fitzgerald was hired as IBM business manager, said Harrison.