Question 1

How much is the NBN transition actually costing the business?

Accepted Answer

The NBN rollout generated a $0.6 billion negative EBITDA impact in FY19, contributing to a total EBITDA decline of 21.7%. Management forecasts this earnings pressure will continue for another two to three years before the financial profile stabilizes.

Question 2

Is the mobile segment still profitable despite the price wars?

Accepted Answer

Mobile EBITDA fell 10.4% in the second half of FY19 as intense market competition forced postpaid ARPU down by 4.7%. While IoT revenue grew 201% to $200 million, it remains a marginal contributor at less than 2% of total mobile revenue.

Question 3

What is the status of the T22 restructuring and asset sales?

Accepted Answer

The T22 strategy has achieved $1 billion in asset sales and radically simplified the consumer business by reducing 1,800 legacy plans to just 20. The company has also consolidated $10.8 billion in book value under the new Telstra InfraCo structure.

Question 4

When will 5G and new growth areas start to replace lost legacy revenue?

Accepted Answer

Significant earnings contributions from 5G and IoT are not expected for at least 12 to 24 months. This delay is compounded by a 7.7% decline in Enterprise Data and IP revenues as NBN Co aggressively captures market share in the high-margin business segment.

Telstra FY19 earnings update: adjusting to a new normal...

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