Telstra sees AI drive digital infrastructure demand

Mobile growth, cost containment and digital infrastructure demand helped deliver strong financial results.

Telstra has released its full-year financial results, reporting strong financial performance off the back of mobile revenue growth, cost containment in consumer and small business fixed services and demand for its digital infrastructure.

Underlying EBITDAaL (earnings before interest, tax, depreciation, amortisation and leases) rose 4 percent to $8.3 billion in the 2026 financial year. Underlying operating expenses fell $454 million, or 3 percent, reflecting cost control and efficiency gains.

Total income fell 0.9 percent, but Telstra says earnings growth was supported by its core businesses, cost discipline and portfolio management.

“As our profit has grown, so too has our investment in our networks and digital infrastructure,” said Vicki Brady, CEO, Telstra, in a results presentation.

AI drives demand for digital infrastructure

Telstra is looking to capitalise on the strong demand for its digital infrastructure, which is being driven by AI. The telco has signed long-term contracts with Google, AWS and Firmus across its Aura Network, subsea cable and long-haul fibre assets, with Microsoft its foundational partner.

“We’re seeing very strong demand signals for our digital infrastructure assets and we are turning those into contracted value,” said Brady.

Telstra now expects about $1.8 billion of strategic investment in Aura and Viasat through to FY28, up from its previous $1.6 billion estimate. It expects the Aura project to deliver a mid-teens internal rate of return (IRR), with cash payback in around nine years.

“Our Aura sales pipeline has increased significantly over the last six months,” Brady said, strengthening Telstra's confidence in the project's expected returns.

Telstra is more than halfway through building its 14,000km Aura fibre network, with more than 8,500km laid and six routes ready for service. It provides high-capacity dark fibre between capital cities, spectrum with scalable bandwidth and fully managed, point-to-point connectivity services.

“We must position ourselves to drive and participate in the value created by AI and the digital infrastructure boom with sovereign capability and assets working in our national interest,” she said.

Mobile growth offsets enterprise reset

Wholesale mobile revenue was particularly strong, increasing 18.6 percent, which the telco attributes to higher average revenue per user and network preference, although higher remediation, compensation and other costs offset some of the earnings growth.

Telstra has continued to expand its product offerings, introducing internet only plans and new 5G fixed wireless and high-speed tiers during FY26. With these new offerings in place, the telco is focused on stabilising customer numbers.

Enterprise revenue fell 5.2 percent as the telco continues to reset the business around its core connectivity offerings. “Our deliberate reshaping of this business, and focus on portfolio management is ongoing,” she explained.

Acknowledging the nationwide outage in July, Brady said an investigation is still underway and promised the telco will be transparent about the findings and the actions that follow.

“As connectivity becomes increasingly critical, we’re committed to continuing our work to further strengthen the resilience of our network and the services Australians rely on,” she explained.