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Telecom shuts up shop as sales fall

TELECOM Corp, New Zealand's biggest telephone company, is to close its unprofitable Web-based shopping unit Ferrit because of a slump in spending.

Ferrit, described as an online shopping mall, links as many as 80 retailers through a single Website. Auckland-based Telecom began the unit in 2005 to help develop online retailing and encourage use of the Internet, Bloomberg News said.

"Ferrit has continued to grow but the current retail environment has meant the break-even point has shifted out a number of years," Alan Gourdie, chief executive officer of Telecom Retail, said.

Telecom is reviewing costs and investing in new networks to arrest a slide in profits amid increased competition and government price regulation.

Telecom's priorities have changed and the focus is now on core businesses such as mobile phones and high-speed Internet, said Gourdie.



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