Question 1

How severe is the current profit decline and what is the primary cause?

Accepted Answer

Net profit fell 39.6% to $2.1bn in FY19, driven largely by a $0.6bn EBITDA headwind from the NBN transition. This earnings pressure is structural and expected to persist for the next two to three years as the NBN migration continues.

Question 2

Is the mobile business maintaining its premium margins despite competition?

Accepted Answer

Profitability is tightening as postpaid ARPU declined 4.7% in the second half of the year due to intense market competition. While total mobile revenue rose 1.6%, this was primarily supported by hardware sales rather than core service growth.

Question 3

Are the internal restructuring and cost-cutting measures meeting their targets?

Accepted Answer

The T22 transformation has already delivered $1bn in asset sales and a management headcount reduction of more than 25%. These cost-outs are essential to defending the 63% EBITDA margins currently held in the Data and IP segment.

Question 4

Which emerging sectors show the most promise for offsetting legacy revenue losses?

Accepted Answer

IoT is the standout growth area, recording a 201% revenue surge in FY19, though it still accounts for less than 2% of total mobile income. Additionally, the sports streaming segment is scaling rapidly, with the Live Pass user base growing 33% to exceed 3 million subscribers.

Telstra FY19 earnings update: adjusting to a new normal…

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