Spark believes it has arrested the decline in its operating earnings.

Spark has axed more than 500 jobs during the past year and chief executive Simon Moutter has been rewarded for the cost-savings through his bonus.

Spokesman Andrew Pirie said more job cuts were possible after the company releases tools that will let customers do more self-service online.

Spark cut its expenses by 5 per cent, or $136 million, in the year to June 30, citing lower labour costs as one of the factors.

The company's annual report shows Moutter earned $3.9m for the year, with part of an $825,000 short-term incentive bonus tied directly to the cost-savings achieved under the company's "turnaround programme".

Moutter said Spark had established a "new winning culture" and forecast it would maintain or increase its operating profit this year.

But Forsyth Barr analyst Blair Galpin questioned whether the improvement would prove sustainable, pointing to a continuing decline in Spark's highly profitable fixed-line phone business.

Job cuts at Spark hit the headlines in 2013 when the company axed just over 1000 positions, leaving it with the equivalent of 5342 full-time employees, not including staff employed by Australian arm AAPT which Spark has since sold.

Moutter said at the time that those cuts had been achieved in a "reasonably unsophisticated" way and the company downplayed the prospect of similar large excisions.

READ MORE: Analyst predicts more jobs will go at Telecom next year

But Spark's annual report shows the scalpel has remained out.

The company's headcount dropped by 505 during the six months to the end of June, leaving it with 4792 employees. The cuts were across the business but many were made towards the end of the financial year in the company's technical division, Spark Connect.

Contractor numbers have also been slashed by almost a third, from 427 to 300, over the past 18 months. The number of Spark employees on salaries of more than $100,000 a year fell by 113 to 1660 over the course of the year.

The next stage of Spark's turnaround programme will see it provide customers with more online self-service tools.

The biggest impact could be on its outsourced contact centres in Manila, whose employees handle simpler customer requests and are not included in Spark's employee or contractor numbers.

Spark did not have any particular targets in mind with regard to additional job cuts, which would instead come as "a natural consequences of customers voting with their feet in terms of how they obtain service", Pirie said.

"If you have a great online experience that customers prefer, then hopefully, over time, demand will shift to that, and that's our expectation," he said.

Spark estimates it increased its dollar share of the mobile market by 2 percentage point to 41 per cent in the year to June.

A stuff poll suggests internet television service Lightbox, which Spark is giving away free with some broadband plans, may be attracting more than eight times as many viewers as Sky Television's rival service, Neon, and more than either the New Zealand or the United States versions of Netflix.

READ MORE: Lightbox versus Neon

But Galpin said Spark had failed to achieve significant earnings growth from its new businesses and there was a significant risk many of its customers would leave when they switched to ultrafast broadband.

OUT FOR THE COUNT

Spark has shed more than 1500 jobs since January 2013, not counting reductions from the sale of businesses such as Australian arm AAPT.

Six months beginning: Employees:

January 2013 6387

July 2013 5512

January 2014 5342

July 2014 5172

January 2015 5297

July 2015 4792

Note: Figures are for "full-time equivalents" employed by Spark's continuing operations.