Telstra CEO Refuses To Dump Foxtel
Reeling from a shocker result, and struggling to work out where Telstra revenue will come from in the future, CEO Andy Penn has declared that their 50% stake in the pay TV provider Foxtel is not for sale.
The decision comes after Foxtel delivered a 17% downturn in profit last quarter. Reports indicate Telstra has considered selling its stake in Foxtel since late 2015, with both News Corp and Telstra also considering a partial float.
“I’m not interested in selling our investment ultimately in Foxtel but if we needed to structurally change it in any way then I’m open to that,” Mr Penn told The Australian.
While News Corp wrote down its share in Foxtel by US$227 million ($295 million) in its second quarter earnings issued last week, Telstra indicated it does not plan to do the same.
In light of overall revenue decline of 3.6%, Telstra reported growth for its Foxtel from Telstra service. Revenue increased by 11.4% to $390 million for the second half of 2016 with 88,000 subscriber additions for the whole of 2016.
The company launched its Telstra TV streaming box last year as part of a plan to diversify the its media offering. The company claimed that 622,000 Telstra TV boxes across Australian households made it the fastest growing streaming device in the country.
“Foxtel is an important part of our business and an important investment for us. And media is a critical part of our overall business as you’ve seen from the growth we are achieving in Telstra TV,” Mr Penn said to The Australian.