Michael Bleby Reporter

Michael writes on emerging markets, architecture and engineering. He has served as a correspondent in Tokyo, London and Johannesburg and has written for Reuters, the Financial Times, The Age and The Sydney Morning Herald.

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Telstra increases mobiles, services revenue

Published 07 February 2013 11:48, Updated 08 February 2013 07:06

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Telstra increases mobiles, services revenue

Telstra chief executive David Thodey says the addition of 3.8 million new mobile customers in the past two and half years has strained the network. Photo: Andrew Quilty

Increasing revenue in mobile and higher value-added services more than offset a decline in Telstra’s traditional fixed-line business in the six months to December, as the former incumbent operator continued its transition away from a telephone utility company to a player in Australia’s emerging digital economy.

Telstra’s after-tax profit rose 9.7 per cent from the same period a year earlier to $1.6 billion as revenue grew just 1 per cent to $12.5 billion, as it added 607000 new domestic mobile customers and expanded its network application and services business. Revenue from fixed lines and the digital media business that includes directory company Sensis declined.

Chief executive David Thodey singled out the growth in mobile services, where revenue grew to 4.6 per cent to $4.6 billion as a success in his presentation to investors on Thursday.

“Over 3.8 million new customers since July 2010,” he said. “That’s been wonderful, (but it’s) put a lot of strain and stresses on the network.”

The company’s 14.4 million mobile customers include 6.9 million postpaid handheld and 3.3 million mobile broadband customers.

“In our view, subscribers remain attracted Telstra’s superior network coverage and speed,” Morningstar analyst Michael Wu said.

Investors welcomed the results, which were in line with expectations. Telstra shares, which have risen 35 per cent over the past 12 months, gained a further 4¢ to $4.62 in trading on Thursday morning.

The changes under way at the former state-owned monopoly were starkly illustrated by the 4 per cent decline in revenue from its fixed-line business to $3.7 billion. More than half of that business (which includes broadband services) is made up of landline, and revenue from those operations fell 10.8 per cent to $2.2 billion. The number of basic access lines fell by 151,000 over the period.

Revenue at the company’s network applications and services unit – providing services such as ehealth technology for use in tele-medicine – rose 10.6 per cent to $636 million.