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Telstra pumps up mobile war chest

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Telstra has swept up the fragmenting mobile market taking on a record 1.66 million new mobile users during the year, pushing mobile revenue growth by 10.7 percent to $AU8.1 billion.

The carrier posted a full-year net profit that was above market forecasts, of $AU3.2 billion, although still down 17 percent on last year.

“We have seen the company return to revenue growth and expect the momentum across the business to continue in 2012,” Telstra CEO David Thodey said.

The strong mobile growth offset the $AU462 million loss from the carrier’s dwindling fixed telephony business, he added.

“Two million new mobile customers joined us across our domestic markets and also in Hong Kong. So that's very gratifying and shows that we're really, I think, addressing a tremendous market opportunity,” Thodey said.

Many of the acquired mobile customers came from VHA which has lost around 375,000 customers due to a year of prolonged coverage and technical issues.

Thodey was focused on keeping up the heat on competitors and said that launching the LTE service later in the year would keep Telstra competitive, offering a more efficient technology.

"The cost per bit is significantly lower on an LTE network as opposed to a HSPA+ network. So it's all about the efficiency of carrying data on the network. LTE is just a far more efficient technology in terms of the cost base. And remember, for us to be able to maintain margins in that market, we really need to be driving down costs on the network," he said.

Thodey said that new sources of growth would be coming from the significant investments in cloud computing, implementing a digital strategy at Sensis, offering Foxtel content across its T-Box services and restructuring the Asian Reach network assets.

T-Box, the carrier’s new IPTV service reported 1.8 million movies downloaded, 190,000 T-Box sales with 25 percent of new broadband bundle customers including T-Box in their package.

Sensis, which launched a new digital strategy in March, has not yet pulled in the SME advertising market as hoped. Sensis’ revenue declined by 6.4 percent to $AU1.7 billion with an EBITDA decline of 9.4 percent to $AU993 million.

Thodey forecast that the restructuring initiatives already in place will continue to bear fruit in 2012. “The year will see productivity and other benefits from a continuing simplification program,” he said. In fiscal 2012, the company expects to return to full year earnings growth with low single digit revenue growth and low single digit EBITDA growth.

“Telstra’s long-term strategy to win customers, improve customer satisfaction, simplify the company and develop growth businesses remains on track, putting us in a strong position as the National Broadband Network rolls out,” he concluded.

Thodey declined to offer any opinion on the federal opposition's proposed "alternative" NBN, saying that the company's role was to work under whatever regulatory regime existed under the government of the day. ®

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