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Telstra Result

By Telco2 min read

A big splash for Telstra’s 6 months to Dec 2006 results. The spin doctors were at their best talking up the NextG network, now with speeds of “up to” 500 billion Gb, and trying to get the broader population of Australia on their side in the battle against the evil regulator (not that they really have an influence).

I wanted to comment on a few little details within the report that affect the service provider community.

This is actually an excellent result for Telstra, and really shows they are serious about rebuilding themselves as a competitive and profitable diversified media and telco business. It reinforces the fact that they are very focussed on retail, and not wholesale.

A major contributor to the increase in operating expenses was due to higher handset subsidies as part of the marketing of NextG. Telstra have built the network very quickly, and want to rack up subscriber numbers as fast as they can to leapfrog the other 3G providers. They have shown their pockets to be as deep as anyone when it comes to offering free* handsets.

Interesting to note that this additional cost was offset by the reduction in mobile termination rates. Telstra (like others) are quite happy to lock customers in to fixed rate contracts for two years because they know rates will keep trending down. This is something many service providers cannot afford to do.

On the PSTN front, while revenues continue to trend downwards, Telstra have (in recent months) arrested the residential churn. This is quite a significant event as far as resellers are concerned. You might have read my earlier piece about the latest aggression from their telemarketers; I have seen this over the last 12+ months among Billing Bureau Partners as they continue to complain about winback campaigns, particularly in the residential space.

How do you think Telstra’s transformation will impact you?

This was also posted at [Billing Bureau].

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