Telstra records 13% increase in profits

Australia’s incumbent carrier, Telstra, turned in a profit of A$3.7bn for the year to end June 30, an increase of 13.5 per cent year on year.

Revenue for the year also jumped 4.7 per cent year on year to reach A$24.8bn, which analyst Ovum noted as even better than it appeared.

The overall sales growth masked retail sales growth of 6 per cent, because wholesale fell 5 per cent due to the rollout of rival ULL-based networks, said Ovum research director, David Kennedy.

“We expect wholesale to stabilise in the next 18 months as ULL expansion is stopped by FTTN, and this will push up revenue growth, provided the current retail growth can be sustained”, Kennedy added.

According to Ovum, Telstra’s full year results show how far the carrier has come, but also the magnitude of the challenge before it. The company is now three years through a five year end to end transformation established back in November 2005.

“Telstra will need every penny of revenue growth to hit their profitability target for 2010”, Kennedy commented. Having rolled out its Next G mobile network and Next IP data network, Telstra is currently focused on moving its customer base to its new CRM and billing systems, which it aims to complete this year.

Kennedy notes that with the old CDMA mobile network already gone, the company should see further operating cost savings in 2009 as old IT systems are decommissioned.