Citing difficulties stemming from the Australian bushfires and the COVID-19 pandemic, Telstra a 5.9 percent drop in FY20 income to AUS$26.2 billion. NPAT decreased 14.4 percent to $1.8 billion. Reported EBITDA was $8.9 billion. After adjusting for lease accounting on a like-for-like basis, EBITDA decreased 0.3 percent to $8.4 billion.
CEO Andrew Penn said: "2020 is proving to be an enormously challenging year for everyone – for governments, businesses, communities, and for all of us as individuals. The emotional, mental, and economic stresses as a result of the COVID-19 pandemic and necessary restrictions are profound. Through this extraordinary disruption – both the COVID-19 and bushfire crises, Telstra was challenged to adapt, to find new ways of supporting our customers, our people and the country in a time of need. I am very proud of the way our team responded, while dealing with the implications on themselves personally. The COVID-19 period has also highlighted that connectivity has never been more critical. We have witnessed a huge acceleration in the digital economy, an area now critical to a fast economic recovery where Telstra has a key role to play."
“nbn wholesale pricing remains the largest negative impact on our fixed business. Without some sort of longterm change leading to improvement in RSP economics, the risk of retail price increases, reduced customer experience or customers moving onto other networks such as 5G will increase. In Telstra’s case the profitability of reselling the nbn is negligible at best – that is not sustainable,” said Mr Penn.
“Earlier this year we decided to bring forward $500 million of capital expenditure planned for the second-half of FY21 into calendar year 2020. This is enabling us to accelerate our 5G rollout further while injecting much-needed investment into the economy. As a result, late last month I announced that we have increased our ambition and plan to cover 75 percent of the population with our 5G network by June next year.”
Some highlights:
- Telstra’s multi-brand strategy continued to deliver subscriber growth, particularly in mobile where it added 240,000 retail postpaid handheld mobile services, including 154,000 from Belong. It also added 171,000 retail prepaid handheld unique users, 347,000 Wholesale services and 652,000 IoT services.
- Overall mobile revenue declined $461 million in FY20. Reported postpaid handheld ARPU declined 8.2 percent or 6.8 percent excluding the impact of COVID-19 on international roaming.
- In the fixed business, revenue continued to be impacted by nbn migration, alongside the continued decline of voice and legacy services and operational issues. Through a focus on differentiated customer experiences including the Telstra Smart Modem, the company continued to have a market-leading share with 46 percent of the estimated nbn market (excluding satellite).
- During the year Telstra reduced underlying fixed costs5 by $615 million, or 9.2 percent. This brought underlying fixed cost reductions achieved since FY16 to $1.8 billion and put Telstra on track to achieve its $2.5 billion net cost reduction target in FY22.
- Telstra has announced 12,000 indirect role reductions and 7,300 direct workforce role reductions since it launched T22 in June 2018. As at the end of June 2020, the direct workforce was around 5,700 lower than two years ago. This figure includes 1,600 new roles recruited like software engineering and cyber security – and some additional roles brought on board in response to COVID-19 to mitigate workforce offshore capacity issues.
