Telstra's profit pummelled by PSTN decline

Stuart Corner
Thursday, 11 February 2010 11:50

IT Industry - Market

Telstra has reported a 2.5 percent decline in revenues, 0.3 percent decline in EBITDA and 3.3 percent decline in net profit for the six months to 31 December driven in large part by what it says was an unexpected acceleration in the decline of PSTN usage.

However when the results are adjusted for the divestiture of Kaz and for currency exchange rate movements, the revenue decline fell to 0.7 percent and EBITDA was marginally positive, 0.2 percent. Adjusted after tax profit was up 13.0 percent

PSTN revenue declined by $22m in the half year compared to the corresponding half in 2009. CEO David Thodey said; "What we are seeing is acceleration in our PSTN rate of decline both from six months ago and over the last two months, and this is the immediate burning platform for us...Our growth in mobile and fixed broadband is not offsetting the PSTN decline and that is what we have to try and balance going forward.

"Contributing to the problem has been a steady increase in the number of households with no fixed line phone service. From only three percent in 2007, the number is now pushing 10 percent."

Thodey said Telstra had responded with reduced price fixed and broadband plans but had been slower than it would have liked getting to market.

"We have been putting new offers into the market...Our new wireless broadband plans have been well received and we have been very pleased with the response, but it just took us too long to get to market with the new offers.

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