The earnings decline of $696 million to $10.1bn – a 6.4% drop – was “slightly better” than expectations, owing to productivity gains and a revenue spurt.
Sales revenue increased by 0.7% or $170 million to $24,9bn.
However, despite Chief David Thodey’s sunny outlook it wasn’t all roses and net profit (after tax) declined by 17.5% to $3,2bn.
Australia’s biggest telco also added 1.66m new mobile customers, including 645,000 new postpaid handheld and 914,000 mobile broadband users.
Optus gained 113,000 new post paid mobile customers in its most recent quarter, announced yesterday.
This was helped by mass consumer exodus from Vodafone – 233K left the troubled carrier, in total, according to Ovum figures.
In the year, total mobile revenue grew by 10.7% to $8.1bn, helped by steady average revenues per customer.
Thodey’s giant also added 158,000 new fixed broadband customers, 190,000 new T-Box and 175K T-Hub users in the last year.
And there are over one million customers now on ‘bundled’ plans. In total, the telco managed to add more than two million mobile customers between its Australia and Hong Kong interests.
Free cash flow declined by 17% to $5.1bn, which was better than expected, and the telco maintained its 14 cent final dividend to shareholders.
“This result demonstrates real progress in our initiatives to improve customer satisfaction, grow our customer numbers, simplify the business and develop growth opportunities,” CEO David Thodey said yesterday.
“We have had one of our best ever years for customer growth, seen improvements in customer satisfaction and have already begun realising the financial benefits of our simplification programme.”
And Thodey has good reason to be positive: Telstra has retained or grown market share in major products over the year.
He also referred to new “growth opportunities” in cloud computing, digital strategy at Sensis and offering Foxtel content on T-Box.
So, the $1bn investment in increasing customer service and cleaning up its once derided reputation, known as Project New, is paying dividends.
“The benefits already evident in the improved financial performance in the second half,” Thodey added.
And comms analysts Ovum agree saying:
“Australia has a clear No.1 mobile market operator – Telstra,” says Nicole McCormick, Ovum’s senior analyst for Telco strategy.
According to Ovum figures, Telstra dominates the market with a 43% share, leaving Optus trailing with 31.8% and Vodafone 25.2%.
“We continue to invest in innovative products and services and this differentiation is increasingly being recognised by our customers. This will be even more important as we move towards an NBN environment,” Mr Thodey said.
Fixed line (PSTN) voice revenues declined by 7.9% to $5.3bn, while retail fixed broadband revenues increased by 1.4% to $1.5bn.
IP access revenues grew by 16.2% to $970 million and Network Applications and Services (NAS) revenue grew 10.7% to $1.1bn.
Sensis revenue declined 6.4% to $1,787 million in the year driven by an 11.4% decline in Yellow Pages revenues. However, the shift to online has seen “encouraging” early take-up of digital products.
With regard to the NBN and structural agreements, here is what Thodey had to say:
“On 23 June Telstra signed conditional Definitive Agreements with NBN Co and the Commonwealth for Telstra’s participation in the rollout of the NBN.”
“The company has subsequently submitted a Structural Separation Undertaking and associated Migration Plan to the ACCC. …and is working closely with the ACCC with a view to obtaining acceptance of our Structural Separation Undertaking before the AGM.”
Referring to the pending $11 bn deal with NBN Co to surrender its copper network to the broadband company:
|“Telstra is committed to giving shareholders an opportunity to vote on Telstra’s participation in the NBN at the company’s AGM on 18 October 2011. The approval of Telstra’s shareholders is one of the key conditions which must be satisfied before these Agreements may be implemented.”|