Telstra reports fall in profit but remains upbeat

28 Aug 2003

Australian telecoms giant Telstra has reported a 1.1% increase in underlying sales revenues for the second quarter of 2003 to AUD9.8 billion, with sales rising by 0.5% to AUD19.9 billion, forecasting stronger growth for the full year and announcing a share buyback of up to AUD1 billion. Although the telco remains upbeat about its results, net profit declined by 6.3% in the year to the end of June, to AUD3.4 billion, the lowest in five years. Telstra attributed the fall to its AUD965 million write-down of its investment in pan-Asian internet infrastructure joint venture Reach.

Meanwhile, Telstra chief executive Ziggy Switkowski has said that the company has no plans to establish a 3G network in the country, claiming that the USD2.9 billion set aside for capital expenditure did not include an amount for 3G rollout. Telstra’s rival Hutchison Telecommunications is spending USD3 billion setting up its 3G network while Vodafone Australia is currently looking for a partner to upgrade its network to carry 3G technology by 2005.