Telstra 1H profit falls 14.4% to $1.38b

Australia’s largest operator Telstra has reported a 14.4% decline in net profit for the first half of its financial year to A$1.79 billion ($1.38 billion), as the company dealt with an increasingly competitive market.

Revenue for the six months ended in December fell 6.4% to A$12.8 billion, with fixed line revenue down 4.7% to A$3.3 billion and mobile revenue falling 8.7% to A$5 billion.

Telstra added 200,000 new mobile subscribers, including 79,000 postpaid customers. Postpaid ARPU declined 2.6% but is showing signs of stabilizing, the operator said.

On the fixed line side, Telstra acts as one of numerous retail resellers of services over the national broadband network (NBN). Telstra’s NBN customers grew by 292,000 to 792,000 giving the company a market share – excluding the small number of customers serviced by the NBN’s satellite service – of around 51%.

Network applications and services revenue meanwhile grew 18% to A$1.5 billion due to higher revenue from cloud services as well as services provided to industry, including Telstra’s share of revenue from NBN commercial works.

Telstra CEO Andrew Penn said the results indicate that the company performed relatively well in a tightly competitive environment.

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

“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.”