Telstra Profit Rises with Investments and Dividend Boost
Synopsis
Telstra has announced a massive profit increase, signalling that the company’s investments in Australia’s telecommunications network are paying off. With its growing mobile business and strengthened market performance, the telco delivered a bumper profit,…
Telstra has announced a massive profit increase, signalling that the company’s investments in Australia’s telecommunications network are paying off. With its growing mobile business and strengthened market performance, the telco delivered a bumper profit, creating significant shareholder value in the first half of this financial year.
For its half-year results ending December 31, 2023, Telstra reported a 7.1% increase in net profit after tax, reaching AU$1.1bn, while overall revenue grew by 1.5% to AU$11.6bn. This marks the fourth consecutive year of first-half underlying growth, demonstrating resilience and a steady upward trajectory despite market challenges.
Mobile Business Powers Telstra's Growth
Telstra's growing mobile business remains a key driver of its robust performance and increasing profit. During the six months to December, the company attracted 119,000 net new mobile handheld customers, reflecting strong consumer confidence in its network. Mobile services revenue also surged by 3.1%, boosted by an increase in average revenue per customer, further contributing to Telstra's profit growth.
Vicki Brady, Telstra's Chief Executive Officer, attributed this success to the company’s ability to provide reliable, high-quality service. "This growth was driven by more people choosing our network," she said.
Price adjustments to both prepaid and postpaid mobile plans in late 2023 also contributed to the company’s revenue and profit growth. Telstra raised the price of prepaid plans by $4 in October and implemented postpaid price increases starting at $3 in August. Brady highlighted that the changes enable the telco to keep investing in mobile performance and service reliability, particularly as network usage continues to rise.
Telstra Profit Leads to Increased Shareholder Benefits
Building on its solid performance, Telstra prioritised rewarding its shareholders. The telco announced a 5.6% increase in its dividend, taking it to 9.5 cents per share. Additionally, Telstra will buy back AU$750m worth of its shares, reflecting its strong cash flow and commitment to delivering value for its investors.
A spokesperson noted that the dividend and share buybacks form part of Telstra’s strategy to balance reinvestment with significant shareholder returns.
Further demonstrating its confidence in future growth, Telstra declared plans to invest an additional AU$800m in its 5G mobile network over the next four years.
Investing in Tomorrow Amidst Rising Competition
Telstra’s investments come as it faces growing competition from Vodafone owner TPG and Optus. The ongoing network-sharing deal between TPG and Optus provides increased telecommunications coverage, challenging Telstra’s market dominance.
TPG's CEO, Iñaki Berroeta, described Telstra’s plans as imposing a “bush tax”—a reference to Telstra’s higher pricing compared to Vodafone. Under the deal, TPG will pay Optus AU$1.19bn to expand its coverage footprint, taking it from 400,000 square kilometres to over a million square kilometres.
Despite this, Telstra sees its investment in its 5G network as a competitive edge to maintain its industry leadership.
Delivering Enterprise Growth and Efficiency
Telstra executives have also highlighted improvements within the company’s fixed enterprise business, where cost reductions and operational efficiency measures have bolstered performance.
“Our fixed enterprise division has grown thanks to the significant progress we’ve made in reducing our product portfolio by two-thirds and reorganising teams to operate more efficiently,” said Brady. This approach reflects Telstra’s broader initiative to refocus and streamline its services for improved customer outcomes.
The company’s efforts align with its long-term strategy to solidify its presence across mobile, broadband, and enterprise services while ensuring scalability and sustainability in an evolving market.
Source
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