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I've been investigating the 'new' Telecom and the new depreciation
policy that ultimately will pay a large part in how much Telecom can
justify charging for their services.

On page 25 of the document below

http://www.telecom.co.nz/binarys/3_aug_07_md&a.pdf

there rests the information I am trying to understand. Basically
Telecom have split their NZ business into four groups:

'Business', 'Consumer', 'T&E' and 'International'. The depreciation
(and amortization) is then listed for each part of the business and
that for 'T&E' is by far the largest.

The only comment that might give some context to this puzzle is a
sentence on the same page which says:

"Amortization expense primarily relates to software assets (T&E),
spectrum licences (T&E) and international cable capacity
(international)."

However, nowhere in the 42 page report does it explain what "T&E" is.

I have already spent over an hour on google and have been unable to
come up with an answer. I am hoping someone here knows what 'T&E'
means in this context.

TIA

Snoopy


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In message <>, Snoopy wrote:

> 'Business', 'Consumer', 'T&E' and 'International'.
>
> "Amortization expense primarily relates to software assets (T&E),
> spectrum licences (T&E) and international cable capacity
> (international)."
>
> However, nowhere in the 42 page report does it explain what "T&E" is.

My guess is something to do with infrastructure. Perhaps "trunks and
exchanges"?

On Sat, 27 Oct 2007 20:05:23 +1300, Lawrence D'Oliveiro wrote:

> In message <>, Snoopy wrote:
>
>> 'Business', 'Consumer', 'T&E' and 'International'.
>>
>> "Amortization expense primarily relates to software assets (T&E),
>> spectrum licences (T&E) and international cable capacity
>> (international)."
>>
>> However, nowhere in the 42 page report does it explain what "T&E" is.
>
> My guess is something to do with infrastructure. Perhaps "trunks and
> exchanges"?

Technical and Engineering. Similar to Research and Development

Lodi

Lawrence D'Oliveiro <_zealand> wrote in news:ffunvj
$mlb$:

>> However, nowhere in the 42 page report does it explain what "T&E" is.
>
> My guess is something to do with infrastructure. Perhaps "trunks and
> exchanges"?
>

I would expect a glossary

--
Ciao, Dave

On 28 Oct 2007 00:49:48 +1300, Dave Taylor
<> wrote:

>Lawrence D'Oliveiro <_zealand> wrote in news:ffunvj
>$mlb$:
>
>>> However, nowhere in the 42 page report does it explain what "T&E" is.
>>
>> My guess is something to do with infrastructure. Perhaps "trunks and
>> exchanges"?
>>
>I would expect a glossary
>

The glossary is on page 42 of the referenced document. But 'T&E' does
not feature.

SNOOPY



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On Sat, 27 Oct 2007 10:22:23 +0200 (CEST), Lodi <> wrote:

>On Sat, 27 Oct 2007 20:05:23 +1300, Lawrence D'Oliveiro wrote:
>>
>>My guess is something to do with infrastructure. Perhaps "trunks and
>>exchanges"?
>
>Technical and Engineering. Similar to Research and Development
>

Both possible. Before I posted the original message I googled the
acronyms dictionary and came up with some other possibilities.

http://acronyms.thefreedictionary.com/T&E

T&E European Federation for Transport and Environment
T&E Technical and Engineering
T&E Test & Evaluation
T&E Threatened & Endangered
T&E Time and Expense
T&E Training and Evaluation
T&E Twin & Earth (type of electric cable)

None of them sound as likely as the two suggested though.

I think that because Telecom are in the throws of splitting off their
wholesale and retail functions for the local loop, so that 'wholesale'
has its own set of accounts, 'Trunk & Exchange' does sound the most
likely explanation.

Particularly when you look at the actual depreciation and amortization
numbers:

Business $14m+$5m=$19m , Consumer $10m+$4m=$14m ,
T&E $385m+$85m=$470m, International $29m+$38m=$67m

The networks are obviously Telecom's biggest assets so it makes sense
that they should depreciate the most in dollar terms.
Compare that to the previous years figures quoted, for comparison, as

Business $16m , Consumer $11m , T&E $434m, International $29m

Now compare those figures with the same depreciation stated under the
old divisions for the financial year 2006:

Wired $376m, Wireless $74m, International $44m, IT Services $8m

SNOOPY


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I guess for those of you who cannot see why I am concerning myself
with such appartent minutae, it is actually IMO very significant.

Telecom have on page 36 of their Financial Year 2007 annual report
made the comment that:

"The determination of the appropriate useful life for a particular
asset requires management to make judgements about, among other
fcators the expected period of service potential of the asset, the
likelihood of the asset becoming obsolete as a result of technological
advances, and the likelihood of Telecom ceasing to use the asset in
its business operations."

On page 47 of the same annual report, we find the current valuation of
"Telecommunication Equipment & Plant" (which by my logic would
abbreviate to 'T & P') is $9,542m. But this figure has already been
depreciated by $6,662m. That gives an on the books value of 'T & P'
of $2,880m. At the current rate of depreciation of T & P ($452m per
year), Telecom is telling us their entire network as it stands today
(poles, exchanges, wires and underground ducting) will be worthless in
6.5 years. That seems very aggressive depreciation to me.

Nevertheless, if the existing Telecom accounting policies hold sway,
everything in the network that exists today will be booked as
worthless by 2015. Perhaps Telecom are correct in their assumptions.
But if there is any value in what is around now in 2015, that means
Telecom will be understating their true profits for the next seven
years. That will give them the opportunity to 'cry poor' and so
charge you and I (and all their wholesale customers) more! How's
that for a conspiracy theory?

SNOOPY





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In message <>, Snoopy wrote:

> On page 47 of the same annual report, we find the current valuation of
> "Telecommunication Equipment & Plant" (which by my logic would
> abbreviate to 'T & P') is $9,542m. But this figure has already been
> depreciated by $6,662m. That gives an on the books value of 'T & P'
> of $2,880m. At the current rate of depreciation of T & P ($452m per
> year), Telecom is telling us their entire network as it stands today
> (poles, exchanges, wires and underground ducting) will be worthless in
> 6.5 years. That seems very aggressive depreciation to me.

Not just aggressive, but wrong, considering the appreciating value of copper
wire.

On Sun, 28 Oct 2007 21:19:57 +1300, (Snoopy) te**yson@caverock.*et.*z
(*is n) wrote:

>On Sat, 27 Oct 2007 10:22:23 +0200 (CEST), Lodi <> wrote:
>
>>On Sat, 27 Oct 2007 20:05:23 +1300, Lawrence D'Oliveiro wrote:
>>>
>>>My guess is something to do with infrastructure. Perhaps "trunks and
>>>exchanges"?
>>
>>Technical and Engineering. Similar to Research and Development
>>
>
>Both possible. Before I posted the original message I googled the
>acronyms dictionary and came up with some other possibilities.
>
>http://acronyms.thefreedictionary.com/T&E
>
>T&E European Federation for Transport and Environment
>T&E Technical and Engineering
>T&E Test & Evaluation
>T&E Threatened & Endangered
>T&E Time and Expense
>T&E Training and Evaluation
>T&E Twin & Earth (type of electric cable)
>
>None of them sound as likely as the two suggested though.
>

Ouch! I have been reading the Telecom Annual Report for 2007 in some
more detail and although I cannot confirm it yet, there is a very good
chance we are all wrong.

Would you believe 'T&E' shands for 'Technology and Enterprises'? Of
course what that jargon conjuring phrase actually means in practical
terms, I have no idea!

SNOOPY




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On Sun, 28 Oct 2007 22:19:21 +1300, Lawrence D'Oliveiro
<_zealand> wrote:

>In message <>, Snoopy wrote:
>
>>On page 47 of the same annual report, we find the current valuation of
>>"Telecommunication Equipment & Plant" (which by my logic would
>>abbreviate to 'T & P') is $9,542m. But this figure has already been
>>depreciated by $6,662m. That gives an on the books value of 'T & P'
>>of $2,880m. At the current rate of depreciation of T & P ($452m per
>>year), Telecom is telling us their entire network as it stands today
>>(poles, exchanges, wires and underground ducting) will be worthless in
>>6.5 years. That seems very aggressive depreciation to me.
>
>Not just aggressive, but wrong, considering the appreciating value of copper
>wire.
>

New Telecom CEO Paul Reynolds was on the radio the other day
proclaiming that all towns with more than 500 lines into them would be
able to get broadband at a rate of up to 20MB/s over the next five
years. IIRC he was going to do this by installing 'fibre to the
cabinet' leaving the old copper wire to take the signal from the
cabinet to the house.

If that is true that makes an awful lot of copper to be scrapped. I
know the price of copper has risen dramatically in the last few years.
But although I have read about vandals stealing pieces of copper
sculpture and copper piping to be melted down, I have not read stories
about theft of phone lines so that they may meet a similar fate. Does
the economics of recycling copper phone wire really make sense today?

SNOOPY




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