Telstra battles on in 'challenging market'

By Phil Boeyen, ShareChat Business News Editor

Tuesday 23rd October 2001

The wireless telecommunications sector is robust but there's little to shout about in other areas according to Telstra (NZSE: TLS).

The company has issued third quarter earnings which show its core domestic businesses grew by just 1.8% to A$4.62 billion for the three months ended September compared to the same period last year.

"This revenue growth continues the trend in the company's results consistently seen through calendar year 2001 and reflects the very challenging situation in the Australian telecommunications industry," says CEO Ziggy Switkowski.

"While growth is steady, and indeed pleasing in the current environment, the contributions from key business drivers are shifting."

Mr Switkowski says that while the wireless business is robust and wireline market shares and churn have stabilised, wholesale revenue growth has reduced substantially, reflecting much slower industry growth.

"Although we are seeing strong growth in new generation data products, aggregate data revenue growth remains flat on the corresponding quarter as a result of platform migration, competitive corporate contracts and lower bandwidth prices."

Telstra mobile services revenue grew by 12.8% with intercarrier services revenue up 15.1%, however local call revenue declined 7.7% and fixed to fixed long distance revenue declined 8%.

In its data and internet business Telstra reports continuing strong demand for new generation products and services, up 42.2%, but revenue from other data products fell 10.5% due to continued migration to lower cost products.

Mr Switkowski says the company continues to deploy its capital expenditure more productively with capital expenditure tracking below the levels for the same period last year.

"Growth in the telecommunications sector remains in low single digits and we believe this will continue for at least the next 2 quarters," he says.

Comments from our readers

No comments yet