Telstra adds 664,000 mobile customers

Telco reports net profit after tax of $4.3 billion for FY15

In the 2014-15 financial year Telstra added 664,000 retail mobile net new services and 189,000 retail fixed broadband net new services, the telco reported today.

Reporting its full year results, Telstra said net profit after tax had dropped by 5.8 per cent. The telco attributed this to the sale of its CSL Hong Kong mobile business in the previous year. Telstra reported net profit after tax of $4.3 billion.

"On a comparative basis our results were of course affected by the sale of our Hong Kong mobiles business CSL in May 2014, and 2014 included the one-off profit from that sale as well as 11 months of operating revenues and profits," said CEO Andy Penn.

"So given that, and on a guidance basis that excludes the one-off profit on the sale of $561 million, total income excluding finance income increased 2.3 per cent to $26.3 billion, EBITDA increased 2 per cent to $10.8 billion and net profit after tax increased 9.8 per cent to $4.4 billion.

"If we also exclude the 2014 operating results of CSL, total income grew 6.6 per cent to 26.3 billion and EBITDA grew by 4.5 per cent to $10.8 billion."

Penn used his full year results briefing to outline the company's move to boost ongoing investment in its network.

Earlier in the year Penn used his first public engagement as CEO, a Committee for Economic Development of Australia (CEDA) event, to outline plans to spend an additional half a billion dollars on the telco's mobile network

Telstra's vision is to be a "world class technology company that empowers people to connect," Penn said today.

"We have already announced an increase in our level of investments into our networks to maintain our leadership. We will be increasing our capex to sales ratio in 2016 and 2017 to 15 per cent of sales, taking our total capex to over $4 billion a year."

"Our network is one of the biggest influences on preference and advocacy with our customers and that's why we've been investing billions of dollars for many years and why we will continue to do so," the CEO said.

"The increased capital expenditure investment will provide more than another half a billion dollars for mobiles. In conjunction with the $2.3 billion that we have invested in 2015, including spectrum, over the three years to June 2017 we expect to have invested more than $5 billion into Telstra leading mobile network."

The telco plans to expand 4G to 99 per cent of the population and boost its mobile footprint coverage to more than 2.5 million square kilometres, which Telstra estimates is more than double the size of Optus' footprint.

Telstra 4G currently covers 94 per cent of Australia's population.

Telstra plans to build 750 new mobile base stations, increasing the total number of mobile sites to more than 9000.

Telstra emerged as the big winner from the government's s $100 million mobile blackspot program.

It will build the lion's share of new and upgraded mobile base stations under the program, while rival Optus will build none.

The program will help fund 429 Telstra base stations and 70 Vodafone base stations. As part of its bid for the program, Telstra pledged to also deploy in 2016 more than 750 small mobile cells to boost coverage in low signal strength areas.

During FY15 Telstra rolled out small cells to around 40 mobile sites, Penn said.

"We will start rapidly deploying the next generation of LTE technology, including voice over LTE, LTE Broadcast and the next stage of LTE Advanced, which can deliver peak ... download speeds of up to 600 megabits per second," Penn said.

"And by fully leveraging our superior spectrum holdings we will create new areas of coverage, and new levels of coverage, and performance leadership for 4GX."

The telco will also continue to invest in its fixed network, Penn said.

"Over the next two years we will invest in our ADSL network, significantly increasing our exchange backhaul capacity, and expanding our line quality across the country," the CEO said.

"We continue to upgrade the backhaul capacity of our cable and ADSL networks to mitigate against network congestion, and over the last two years, we've improved service to more than 1.5 million ADSL customers and 250,000 cable customers," Penn said.

"In addition, by the end of august 2015, we will have improved line stability for 2.2 million retail and wholesale ADSL customers."

During the year Telstra launched its national Wi-Fi network, dubbed Telstra Air.

"We have created Australia's largest Wi-FI network," Penn said.

"It provides access to thousands of Wi-Fi hotspots in Australia and more than 16 million hotspots overseas as part of an Australian-exclusive arrangement with the global wi-Fi provider, Fon.

"Telstra Air gives our fixed broadband customers the ability to access their home fixed broadband allowance at any of our hotspots."

There are currently 3500 public hotspots and more than 65,000 BigPond broadband customers have opted into the service, which turns their home Internet connections into additional hotspots.

During the year Telstra also signed nine councils to its public Wi-Fi partner program.

The Wi-Fi network will expand significantly during 2016, Penn said.

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