Australia’s Telstra has published its financial results for the six months ended 31 December 2016, revealing year-on-year declines in both revenues and net profit as increased competition in the mobile sector, planned restructuring costs and the impact of regulatory decisions all took their toll.
In the six months under review Telstra generated revenues of AUD12.806 billion (USD9.6 billion), down 3.6% from the AUD13.289 billion it reported in the corresponding period a year earlier. Total income (excluding finance income) was AUD13.703 billion, compared to AUD13.802 billion, with EBITDA also declining – by 1.6% y-o-y – to AUD5.189 billion. Telstra noted that regulatory decisions had impacted both reported income and EBITDA for the first half of its current fiscal year by AUD400 million and AUD38 million, respectively, due to the government’s regulation on mobile termination rates (MTRs), as well its Final Access Determinations (FADs) for fixed line services and domestic transmission capacity services. Excluding such impact, the company said, higher total income was achieved through double digit growth in Network Applications and Services (NAS) and increased receipts from nbn co, the company overseeing the National Broadband Network (NBN) project. With net profit tumbling by almost 12% y-o-y to AUD1.785 billion, such a decline was attributed in part to planned restructuring costs, as well as increased amortisation associated with shorter asset life for business software.
One bright spot for Telstra was with regards to mobile customer numbers, with the operator reporting a 3.1% annual increase in wireless accesses, which reached 17.433 million as at 31 December 2016. It registered gains in both pre-paid (up 1.9% y-o-y to 2.653 million) and post-paid (up 2.3% to 7.555 million) subscribers, while mobile broadband data card customer numbers rose to 3.993 million, a 2.0% increase against end-2015. Fixed broadband connections also rose, reaching 4.253 million at the end of the reporting period, from 4.115 million, with an increase in retail subscribers more than offsetting a decline in wholesale connections. Fixed voice connections continued to decline, however, falling to 6.800 million at the end of 2016, down 5.6% y-o-y, with retail lines accounting for the lion’s share – 5.549 million – of the total, down from 5.852 million at end-December 2015.