Telstra IT services business breaks $3 billion

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Telstra IT services business breaks $3 billion

Telstra's IT services business has blown past $3.3 billion in revenue off the back of three key acquisitions and a growing cloud business.

The Network Applications and Services (NAS) grew from $2.5 billion by 30.6 percent for the 2015 financial year ending 30 June.

Telstra's cloud business had another bumper year based off growing consulting, professional services and hardware sales. Cloud revenue grew 50.2 percent to reach $374 million for the year. The telco singled out the acquisitions of two Microsoft partners last financial year, Kloud and Readify, which continued to boost Telstra's cloud business. Telstra also mentioned the added revenue from Pacnet, the cable operator and telecommunications provider it acquired in 2014 for $857 million.

Industry solutions, which include NBN and other commercial work took over as the largest segment of the NAS business, growing 66 percent to $1.2 billion. All of the NAS business segments grew this year, which includes managed network services with $664 million, unified communications with $882 million and integrated services with $202 million.

Telstra also highlight a number of significant enterprise contract wins throughout the year, including an extended contract with NAB and a deal to supply integrated cloud solutions to a "major supermarket chain."

Out of Telstra's five core product segments, the NAS business was the only one to grow this year. Mobile was still the largest segment with $10.1 billion, followed by fixed broadband with $6.4 billion, data and IP with $2.6 billion and global connectivity with $1.4 billion. Revenue from 'other core' businesses also grew, which includes Foxtel, media and the sale of assets.

For the entire Telstra business, revenue was up 4.3 percent to $28.2 billion, while EBITDA was up 2 percent to $10.7 billion.

The telco also revealed it connected 676,000 NBN services in the year. It now controls 52 percent of the NBN services market, excluding satellite connections.

Telstra's results could look very different next year as the telco looks to implement a company-wide restructure of its business segments.

Telstra's largest segment, Telstra Retail which accounted for $16 billion in sales, will be renamed Telstra Consumer and Small Business, and will also include the small business customers from Telstra Business.

Global Enterprise and Services, which brought in $6.3 billion, will be renamed to Telstra Enterprise and will merge with enterprise premier business customers from the former Telstra Business unit. GES comprises of Telstra's largest enterprise customers internationally and domestically and includes products from the NAS segment.

Telstra chief executive Andy Penn revealed the restructure in June, which could see up to 1400 staff let go over a six-month period. The restructure was announced in order to fill a $2-3 billion earnings gap left after construction of the NBN is completed.

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