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.
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."