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Smartphones drive Telstra mobile growth, Optus follows with 700k adds

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Australia’s mobile market remains the key battleground for the country’s largest carriers, with both Telstra and Optus announcing growth in mobile subscriber numbers today.

Announcing its results to the Australian Stock Exchange today, Telstra said it had added more than 900,000 new mobile customers in the first half of the 2011 financial year, while over the last nine months, Optus has reported more than 700,000 new mobile subscribers.

The result will surprise analysts who have anticipated a mobile slowdown, with mobile devices already more common than people in Australia.

Optus’ mobile revenue for the quarter is 6.9 per cent higher than for the same quarter last year. Telstra’s first half this year showed a similar performance compared to the same period last year, at 6.5 per cent services growth.

Telstra’s performance was underpinned by fast growth in smartphones. Higher handset revenue means that total mobile revenue growth in the half-year was well ahead of subscriber growth, at 10 per cent. More than 25 per cent of Telstra’s mobile customers now own smartphones.

Telstra has also surprised the market by matching growing mobile broadband sales with growth in its fixed broadband products. Reversing the decline of recent years, the carrier reported 139,000 new fixed broadband customers for the half-year. Optus, meanwhile, has reported only flat growth in fixed broadband: its total fixed broadband customer base at the end of 2010, at 987,000, is only 7,000 subscribers more than at the end of 2009.

While failing to halt the decline in PSTN (public switched telephone network) revenue, fixed broadband growth has stabilised the number of fixed network subscribers.

Telstra CEO David Thodey used the company’s fixed / mobile growth as evidence that the two products should be seen as complementary rather than as exclusive.

Telstra also says its negotiations with the federal government and NBN Co are progressing so well that it expects to put an agreement to its shareholders by July this year.

If the agreement progresses, Telstra would migrate its customers to the NBN as the network rolls out, while retaining the retail relationship with those customers, and would progressively decommission its copper network. ®

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