Thursday, 16 February 2017 10:22

Telstra half-yearly results show drops in profit, revenue Featured

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Telstra's half-yearly profits have dropped by 14.4% and its revenue has fallen by 3.6%, according to an announcement on Thursday.

The biggest player in Australia's telco market reported profits of $1.79 billion, down from $2.09 billion in the corresponding period a year ago. Revenue was down from $13.3 billion to $12.8 billion.

As other telcos have done, Telstra blamed its declining numbers on decisions by the Australian Competition and Consumer Commission to reduce the amount that can be charged for calls and SMSs to a rival system and ADSL charges known as Final Access Determination.

These hits to business were said by Telstra to have affected its income and EBITDA by $400 million and $38 million respectively.

On the bright side, Telstra said it had added 200,000 domestic retail mobile services, 90,000 retail fixed broadband customers, 124,000 bundles, 292,000 NBN connections and 322,000 Telstra TV devices.

It also said it had reduced underlying core fixed costs by 2.6% or $92 million.

Chief executive Andrew Penn said the results indicated a good performance in a highly competitive market, gaining customer numbers and increasing market share in NBN.

"It is significant that we were able to increase subscriber numbers in mobiles and retail fixed plans despite the increased competition," he said.

"Data volumes have increased and intense competition on pricing across fixed, bundles, mobile, data and IP has had an impact. Those are in parallel with the acceleration of the rollout of NBN which, over the longer term, will have a negative impact on EBITDA of $2-3 billion.

"We have a clear strategy to differentiate our products through the speed, coverage and reliability of our networks, innovative product design and new customer experiences, including access to media content.

"We are committed to improve the experience we provide our customers and as announced last year, we are investing up to $3 billion incremental capital expenditure in networks for the future and digitisation of the business.

"Work has commenced on these projects which will position us to deliver significant customer benefits, reinforce our market differentiation over the longer term, and deliver business benefits such as capital efficiency, reduced operating costs and increased revenue."

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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