Australia’s largest mobile operator Telstra posted record profits for the six-month period ending 31 December, as it expanded its 4G user base and strengthened ARPU.
The profit jump marks the seventh consecutive half of earnings growth. The company’s guidance for the full year, however, forecasts revenue and EBITDA to remain at last year’s levels.
The company’s net profit for the first half of its fiscal year rose 21.7 per cent to AUD2.1 billion ($1.62 billion) and revenue inched up 1.6 per cent to AUD13 billion.
Mobile revenue expanded 9.6 per cent to AUD5.32 billion during the half, the strongest six-month growth rate in three years, said Moody’s VP Ian Chitterer.
The company, which has a 51 per cent market share, said its 4G coverage now reaches 90 per cent of the population and will cover 94 per cent by the middle of the year. Chitterer said its wide 4G coverage is an important differentiator and key driver of its operating strength.
Its mobile connections base in Australia grew by 1.2 million from a year ago to 16.4 million. The company said one million customers now have 4GX-compatible (its brand for LTE carrier aggregation) devices.
Postpaid revenue was up 8.3 per cent to AUD2.7 billion, with ARPU increasing 4.4 per cent to AUD69.71. Postpaid customers account for 44 per cent of its users. Prepaid ARPU grew 13.8 per cent, helping prepaid revenue grow 18.7 per cent.
The fixed business continued its slide, declining 1.7 per cent to AUD3.5 billion and now accounts for 28 per cent of total revenue compared to mobile’s 42 per cent. Fixed data revenue, however, increased 7.8 per cent to AUD1.17 billion as it added almost 200,000 new customers over the past year, bringing its total to three million.
Total operating expenses increased 2.3 per cent to AUD7.68 billion. It spent AUD1.3 billion on spectrum licences.
Capex fell 4.7 per cent to AUD1.72 billion as its 4G rollout nears completion.
Its EBITDA margin rose 1 point to 40 per cent.
Telstra’s planned acquisition of Pacnet, which is expected to be completed in Q4, will expand its international network and double the scale of its enterprise business in Asia, the company said. Telstra estimates the purchase will yield AUD65 million in cost savings.
The company also announced it will relaunch a plan that allows shareholders to reinvest their dividends.