Telecom revises financial guidance

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STOCK EXCHANGE ANNOUNCEMENT

15 April, 2010

Telecom revises financial guidance and provides
update on regulation

In accordance with listing rules, Telecom has today announced changes to its
FY11 to FY13 financial guidance. FY10 financial guidance remains unchanged
(refer appendix).

FY11 to FY13 Guidance Changes

The financial guidance provided below assumes retention of AAPT and does not
reflect any impact from the Government’s Ultra Fast Broadband initiative (“UFB”),
which is likely to reshape the industry.

[table]

Changes to FY11 to FY13 EBITDA guidance reflect, amongst other things:

* TSO/RBI regulatory decisions as previously advised on 16 March 2010

* A softening revenue outlook due to:

- Lower mobile revenue growth

- Price pressures in voice and data markets

- Flow on impacts of the economic downturn

* Management initiatives to drive harder on cost out programmes outlined in
May 2009

Telecom expects Capital Expenditure to reduce from $1.1 to $1.2 billion in FY10
to $1.0 to $1.1 billion in FY11. This guidance has not previously been provided.

Update on Regulation

“We are highly focused on how we position Telecom for a UFB world, and the
implications for this on Telecom’s regulatory undertakings which are designed for
a copper, not fibre world” said Paul Reynolds, Telecom CEO.

“We are open to working with the government on a full range of approaches to its
UFB initiative. Our focus is on delivering the best result for Telecom shareholders
and New Zealanders.”

…

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