Telstra report H1 results

Stuart Corner
Friday, 27 February 2009 01:09

IT Industry - Market

Telstra has reported increased sales revenue of 3.2 percent to $12.64b and EBITDA growth of 3.1 percent to $5.33b. NPAT fell by 0.5 percent or to $1.92b. Earnings per share were 15.5 cents, down 0.6 percent . Mobile services revenue grew by 12.4 percent to $3.07b. Retail broadband revenue grew by 31.3 percent to $1.20b. Sensis sales revenue grew by 8.4 percent to $1.03b.

PSTN revenue declined by 5.1 percent to $3.22b following on from a decline in the second half of fiscal 2008 of 4.4 percent. The decline was driven largely by a reduction in wholesale PSTN revenue of 23.8 percent due to the uptake of ULL services. However Telstra's also reported that the rate of uptake of ULL services was showing signs of slowing.

"The decline in Wholesale SIOs was driven by wholesale customers continuing to migrate their customer bases to their own infrastructure. We have seen a significant increase in ULL SIOs, up by 88k during the first half of fiscal 2009. There has however been a noted slow down in the uptake of ULL....despite the low prices in metro Australia." In 1H 2008 152k ULL services were activated, and 136k in the second half.

On the mobile front Telstra said: "Our 3GSM SIO base is now in excess of 5.2 million or 54.0 percent of our total mobile base; with migrating customers continuing to record higher ARPU than 2GSM customers. The 3GSM/2GSM postpaid ARPU premium continues to be in excess of $20...Wireless broadband (WBB) (defined as data usage equal to and in excess of 300MB) growth continues to be very strong and at the end of December 2008 our WBB SIOs reached 828k. More importantly, our strategy of focussing on high-end customers continue to drive growth, with $318m of revenue in the first half."

Telstra however added that: "Following the launch of prepaid wireless broadband and aggressive price-based competition in the market, we are seeing some dilution of wireless broadband ARPU. However, it remains well above industry average at around $80 per month." Telstra estimates it grew its share of the mobile market by one percent in the half year to be in excess of 44 percent.

Transformation strains customer service
Telstra said: "The migration of Telstra Consumer customers from our legacy systems continues and is on track. We are operating at scale and the new systems are working well. By early February we had deployed 1,900 internal and external sites with the new system and trained 17,900 users. We have migrated more than 7.1 million customers and 13.1 million services, issued 27.2 million billing invoices, received 24.6 million payments and we are processing 230 million records every day."

However the company admitted that the transition had imposed considerable strains on customer service resources. "During the half and as the migration peaked, our processes dealing with order provisioning, customer queries and complaints have been severely tested. During this time our customer experience metrics were not where we wanted them to be. But these are now improving."