Telecommunications
Telstra half-yearly profits fall
(17 February, 2010) Telstra has turned in a worse than expected performance for the first half of 2009-2010 and has told investors that the second half may be much the same.
This was the thrust of the company’s half-yearly results announcement on 11 February which revealed a drop in sales revenue of 2.5% and a fall in after tax profits of 3.3%.
It is true that once “abnormal” items such as the sale of Kaz and currency fluctuations are taken into account, Telstra’s results look a lot better. In other words the underlying performance of the company is not as bad as the numbers suggest - a point that members should remember when thinking about fair EA wage rises.
For instance, adjusted post-tax profit rose a healthy 13% .
But the figures do point to an acceleration of the longer-term trend that is causing headaches for telcos around the world: the decline of the fixed line business as the mobile tide becomes a flood. Revenue from traditional wireline (PSTN) products fell by 6.9% over the last 12 months and even wireline retail broadband revenues only rose by 1.4%.
The fact is that more and more people are relying on mobile services for both their voice and data needs. Telstra estimates that the number of mobile-only households is now 10%.
Meanwhile, although mobile services produced positive revenue growth (4.7%), it was at a lower rate than last year and well below Optus’ 11% mobile revenue growth over the same period.
As for costs, they declined by 2.1%, due largely to “control of headcount and salary levels”. That’s Telstra- speak for ongoing redundancies and, for award-based employees, over two years without a wage rise until the recent 2% + 2.5% payments last December.
Yet at the same time, as Telstra points out, field workforce productivity is up!
CEPU members believe they should be fairly rewarded for those gains, not treated as the “poor relations” of the workforce as a way of boosting shareholder returns.
For more information, contact the CEPU via feedback@cepu.asn.au