On 15^th August 2019, Telstra announced its FY19 earnings.

Falling ARPUs and NBN related impacts outweighed subscriber gains resulting in earnings declines.

The Australian telco market remains competitive with nearly all sub-segments experiencing varying degrees of pricing pressure. Telstra as the market leader is most at risk as competitors increase share across different segments.

On 15^th August 2019, Telstra announced its FY19 financial results. Some of the key highlights from the announcement include:

• Revenue of A$27.8bn, down 3.6% over FY18 driven by competitive pressures across all segments of the Australian telco market
• EBITDA decreased 21.7% to A$8.0bn driven by Telstra absorbing about A$0.6bn of the negative impact from the NBN in FY19. The remaining decline in EBITDA was mainly driven by lower mobile revenues and lower revenues from Data and IP
• Overall net profit of A$2.1bn, down 39.6% over FY18 driven by higher restructuring costs associated with Telstra’s T22 strategy and NBN related headwinds

Contents

Our take

Telstra FY19 earnings update

• Mobile
• MVNOs
• Sports and media content are a key focus area
• Fixed – NBN impact continues…
• Enterprise
• InfraCo
• T22 strategy scorecard
• 5G and IoT – the two main growth drivers for Telstra
• Our take

List of charts/tables

Figure 1. FY19 Telstra key financials (A$bn)

Figure 2. Product performance: Mobile 2H19

Figure 3. NBN impact on Telstra’s EBITDA

Figure 4. Telstra InfraCo performance

Figure 5. Telstra T22 strategy scorecard