Telstra full-year profit drops 8.4%
Thu 16 August 2018 - 2:48 pmNews
Telstra’s full-year profit has dropped 8.4 per cent to $3.56 billion, as the telco giant faces increasing competition in the market and is hurt by the further rollout of NBN.
Total revenue for the 12 months to June 30 was largely unchanged at $26 billion, with mobile revenue flat at 0.4 per cent and fixed line revenue declining by 9.2 per cent.
The company said challenging trading conditions are expected to continue in 2018/19, with earnings likely to be impacted by ongoing pressure on average revenue per user (ARPU) and costs from the NBN network rollout.
NBN connections grew by 770,000 to 1,946,000 for a total market share, excluding satellite, of 51per cent.
In a letter to shareholders on Thursday, Telstra chairman John Mullen and CEO Andrew Penn said the rollout of NBN has had an “enormous impact on our business”.
“Wholesale prices have risen, meaning we and other industry participants are facing a fixed-line market where reseller margins are rapidly reducing,” said Mullen.
“At the same time, competition in the mobile market is increasing with the expected entrance of a fourth mobile network operator.”
Postpaid handheld revenue declined by 1.4 per cent to $5.37 billion, with ARPU dropping by 3.4 per cent from $67.70 to $65.41.
In May, Telstra launched unlimited mobile data plans and scrapped excess data charges in an effort to attract and retain data-hungry customers.
The move was a part of the company’s new Telstra2022, or T22, strategy, aimed at simplifying customer experience and reducing cost base.
Telstra declared a final dividend of 11 cents per share, down from 15.5 cents a year earlier and leaving the full year dividend at 22 cents, down from 31 cents a year ago.
In June, Penn revealed a plan to slash a quarter of the telco’s workforce, under its T22 strategy to reposition itself for growth.
“While it is less than two months since we presented our new strategy, we are well into the execution phase, building on the momentum provided by our up to $3 billion strategic investment in Networks for the Future and digitising the company,” he said in a statement.
Dynamic Business contacted Telstra for further comment.