Telstra Corporation signed up more than a million new customers in the first half of its financial year, giving a hefty lift to its profit.
The nation’s largest telco added 958,000 mobile customers in the six months to December 31 on top of 106,000 new fixed broadband subscriptions.
Moreover, the number of customers bundling together a number of different Telstra products grew by 206,000 to more than 1.2 million.
It continued the grab for market share that began in 2010/11, when Telstra earmarked $1 billion for an aggressive marketing campaign that, coupled with lower prices and better customer service, netted 1.66 million new mobile and broadband customers.
“Our strategy is delivering value for customers and for our shareholders,” Mr Thodey said during Telstra’s results presentation in Melbourne on Thursday. “The momentum in our business has continued into the first half.”
Revenues from mobiles rose 10.9 per cent to $4.39 billion, which Telstra said was the strongest growth in six halves.
Ovum research director David Kennedy said Telstra had successfully converted its market share gains in the last 18 months into better profitability through improved economies of scale and tighter cost control.
“Importantly, it seems to have made these share gains permanent, as permanent as they can be in a competitive industry,” Mr Kennedy said in a research note.
Telstra said net profit for the six months to December 31, 2011, rose 22.9 per cent to $1.468 billion, slightly below market expectations of $1.518 billion.
As a result, Telstra shares closed down seven cents, or 2.03 per cent, to $3.37 on a day the broader market fell 0.2 per cent.
In terms of earnings guidance, Telstra presented an unchanged outlook for low, single-digit, revenue and earnings before interest, tax, depreciation and amortisation growth for 2011/12 year, as well as a 28-cent-per-share, fully franked, dividend.
Mr Thodey said it was gratifying to have such strong customer growth in mobiles, both domestically in Australia and also in Hong Kong.
“We have a very clear strategy around investing for profitable growth,” he said. “While the opportunity is there we will continue to accept customers onto our network, when we have competitive offers. We are making no forecasts on that.”
Meanwhile, the fixed line PSTN business shed 136,000 customers and suffered a nine per cent decline in revenue to $2.49 billion.
And as was previously flagged to the market, Telstra said sales revenue from its directories business Sensis fell 24 per cent to $528 million.
Sensis was expected to report a high teens decline in revenue for the full year.
In 2011, Telstra said Sensis was underperforming and announced a three-year plan to arrest the slide in revenue and earnings and to cope with the loss of advertisers from its printed directories.
Telstra on Thursday said Sensis’s first-half result was impacted by the upfront costs of the restructuring and an acceleration in the decline of its Yellow Pages print revenue as the market evolved more rapidly than expected.
“Since launching the strategy in March 2011, it has made progress in restructuring its operations to adapt to the challenges of the directories market,” Telstra said.
