Sales & Marketing
Training & Development
PCs & Servers
Imaging & Printing
Telstra profit jumps to $1.9 billion as PSTN hangs on
Feb 22, 2008 6:03 AM
Telstra has reported a 13 percent increase to $1.9 billion in its half-year profit report, attributing the gain to rising sales of high-speed Internet services which offset lower revenue from its fixed-line business.
Telstra CEO, Sol Trujillo attributed a large proportion of the growth to market share gains in both the broadband and post-paid mobile market and to growth in its PSTN business.
The growth in PSTN revenue comes as a surprise to analysts who expected nascent technologies like Naked DSL and IP telephony to disrupt Telstra’s traditional fixed-line revenues.
Gartner principal analyst for telecommunications, Bjarne Munch, agreed that Telstra’s PSTN growth was the most surprising element of the financial results, but warned that unless the telco looked to medium and long-term solutions, the profitability of its fixed-line business would degrade.
“I was surprised by the positivity of some of the results and it was very interesting that Telstra was able to use broadband to offset the PSTN decline, but how long that lasts remains to be seen,” Munch said. “It’s only now that we are seeing significant growth in ULL which will be very disruptive to Telstra’s PSTN revenue in the future.”
Regardless of analyst forecasts and expectations, Trujillo was jubilant with the results.
"We have again exceeded analyst consensus, delivering not only strong top-line revenue growth but also accelerating earnings at the bottom-line. Our transformation is revitalising every aspect of the business and we now rank at or near the top of our global peer group on many key financial performance measures,” he said.
Trujillo also said he was encouraged by the performance of all of Telstra's retail business units, which generated strong revenue growth and gained market share. Retail sales revenue grew 7.6 percent for the half, with sales revenue growing 8.5 percent in Telstra Consumer and Channels, 9.3 percent in Telstra Business and 4.5 percent in Telstra Enterprise and Government.
On the expenses front, Telstra spending increased by 5.6 percent to $9.4 billion. Telstra said this was fuelled by higher redundancy costs, Telstra’s planned CDMA migration, and strong mobile and broadband volumes leading to increased cost of goods sold.
Despite the expense increases, the strong profit results will go a long way to help justify Trujillo's spending boost on new technology such as its $1.1 billion Next G network.
"As we foreshadowed at our Investor Day, operating expenses are expected to increase this year as the costs of the IT component of our transformation peak, before starting to decline as we turn off our legacy systems and network platforms. Earnings and free cash flow will continue to improve," Trujillo said.
But even the Next G investment has started to pay off. Just last week at GSMA Mobile World Congress in Barcelona, Trujillo explained that fast user adoption for it Next G network helped revenue from
high-speed connections exceed sales of older services for the first time.
Follow us on
Telstra suffers another outage as $50m poured in for fix
Telstra releases 4G on wholesale
Former NBN COO joins Service Stream board
Telstra leads $8m investment in Netflix tech provider
Aussie ISV seeks $10 million for global expansion
VMware debuts cheaper NSX software-defined networking
Budget 2016: Which govt departments won tech money to burn?
Small businesses get tax cuts in federal budget
Budget 2016 cracks down on multinational tax dodgers
Send us your tips
You must be a registered member of CRN to post a comment.
Click here to login
Click here to register
Dick Smith reopens under Kogan
Online store launches one month ahead of schedule.
Rhipe pockets $2.4m with LiveTiles sell-off
Cashes in after 18 months.
Resellers react to budget 2016
What did the channel think of the small business initiatives?
Sign up to receive CRN email bulletins
Here are the top 50 technology startups in Australia
SMS chief falls on sword, 100 staffers gone
Michael Dell reveals new name for merged Dell-EMC
JB Hi-Fi enterprise services head departs in reshuffle
Symantec CEO steps down
Powered by Disqus
Meeting which tech founder would leave you most starstruck?
Larry Page / Sergey Brin
view previous polls »
Powered by Disqus
CRN Magazine looks in-depth at the emerging issues and developments for the channel, and provides insight, analysis and strategic information to help resellers better run their businesses.
What's in this issue?
Most popular tech stories
7 accounting packages for Australian small businesses compared: including MYOB, QuickBooks Online, Reckon, Xero
How do I make sure my email is properly synced between all my computers?
Do you know these 12 eBay tips?
Tip: Your shop can use a smartphone instead of an EFTPOS terminal
How long will a UPS keep your computers on if the lights go out?
Photos: A look inside an NBN exchange
TPG buying highest speed NBN wholesale services
Gumtree hacked, user details stolen
IBM Australia's profit falls 60 percent
Feds still paying for Windows XP custom support
Top 25 fantasy games of all time
How to: How much RAM do you really need?
Review: Dell's XPS 15 is on the best Windows 10 laptops we've seen
Top 15 obscure video game consoles for collectors
In the game of thrones, you win or you die - and Foxtel will lose
There has never, ever been a better time to be a PC gamer
3 reasons why Mafia III is the most daring series entry yet
20 key tips for succeeding at Rainbow Six Siege
A mob of Mafia III screenshots
Star Wars original trilogy heroes and villains
PC & Tech Authority
nextmedia Pty Ltd
. All rights reserved. This material may not be published, broadcast, rewritten or redistributed in any form without prior authorisation.
Your use of this website constitutes acceptance of nextmedia's
Terms & Conditions
Login to CRN
Email or Username:
* Email or Username required
* Password required
Forgot your password?
Don't have an account? Register now!
To request a
, enter the email address linked to your CRN account and we'll send one to you.
* Email required
* Invalid Email address
* Invalid Email address
Click here to return to Login Form
comments powered by Disqus.