News
Australian incumbent reports modest increase in full-year revenue, takes A$246 million haircut on Ooyala.
Telstra on Thursday said it plans to spend an extra A$3 billion (€2.07 billion) on its networks and digital transformation over the next three years, as it looks to consign a series of embarrassing outages to history.
"Our customers and our networks are our biggest assets. We must invest to set new standards and deliver excellent experiences for our customers," said the Australian incumbent’s CEO Andrew Penn, in a statement.
The specifics remain under wraps; Penn said he plans to drip-feed details of the investment programme during fiscal 2017-2019.
It would appear from his comments though that some of the funds will go towards upgrading Telstra’s access networks and back office IT systems.
"Average monthly data consumption on our networks increased seven-fold over the past five years, with mobile traffic growing almost nine-fold in the same period. We are now accommodating and anticipating growth in the number of connected sensors and devices as well as specialised applications and services," he said.
"We will simplify products and platforms – we need to retire old technology and systems that slow down and complicate how customers are served," Penn added.
Improving network reliability will no doubt continue to be one of Telstra’s strategic imperatives, regardless of whether such an objective falls within the A$3 billion spending spree announced on Thursday.
Telstra has suffered a series of high-profile network outages this year, most recently in May, when some NBN and ADSL customers had difficulty connecting to the Internet. This followed three separate incidents affecting its mobile networks in February and March.
Telstra undertook an end-to-end review of its networks in partnership with its suppliers spending A$50 million on implementing the resulting recommendations. In June, Telstra committed a further A$250 million to improving reliability.
Thursday’s announcement was made the same day that Telstra published its full-year financial results, and confirmed a A$1.5 billion share buyback programme.
Revenue for the 12 months ended 30 June came in at A$25.91 billion (€17.89 billion), up 1.5% on 2015. Gross profit was up 3.6% to A$27.05 billion, while net income from continuing operations fell 6.9% to A$3.83 billion.
Full year operating expenses increased 6.4% on 2015 to A$16.6 billion, and include a A$248 million impairment charge related to video platform specialist Ooyala, which Telstra acquired in 2014 having spent A$331 million building up a 98% stake in the company.
The impairment reflects "changing dynamics in the intelligent video market and business performance," Telstra said.
Looking ahead to fiscal 2017, Telstra expects to generate gross income of A$28.3 billion, and EBITDA of A$11 billion, representing growth of 2.6% on fiscal 2016.
