Telstra IT services smashes past $2 billion revenue

Telstra has reported $2.4 billion revenue from its network applications and services (NAS) business in the 2015 financial year.

It was the third consecutive year of strong growth for the IT services unit, as the carrier's shadow looms increasingly larger over the Australian channel.

NAS revenue jumped by around 23.2 percent or $455 million dollars for the year to reach $2.34 billion, up from nearly $2 billion in 2014.

To put that into perspective, Telstra’s services component is now almost equal to its carriage revenues from its government and business customers.

The lion's share of revenue comes from unified communications, which accounted for $762 million in revenue. Telstra saw plenty of growth in cloud services too, which jumped by 33 percent to $286 million.

The largest growth of all was in “industry solutions”, which includes commercial work for NBN as well as Telstra’s SNP Monitoring business. That segment grew by 41.6 percent to reach $636 million.

Telstra also broke the half-a-billion dollar mark in managed network services, pulling in $592 million for the year.

Telstra’s channel ambitions were clearly shown by its investments, with over a billion dollars spent on acquisitions and investments in the IT space during the year. This included the acquisitions of Pacnet, Bridge Point, AFN Solutions, Neto and Globecast.

Telstra's health business has completed 15 acquisitions in the last 18 months. Telstra also added to its software business during the year by buying Ooyala and other video analytics-related businesses.

Asked if there would be further acquisitions in the IT channel, chief executive officer Andrew Penn said: “If we see other opportunities to do further things like that, and to acquire further capabilities to support that, we absolutely will.”

Adding to Telstra's IT credentials, during the year it was crowned Cisco’s global Collaboration Partner of the Year, Polycom’s Global Cloud Provider of the Year, and Frost & Sullivan’s Managed Service Provider of the Year in Asia Pacific.

Telstra also partnered with Cisco, AWS, VMWare and IBM to expand its cloud services during 2015.

Overall, Telstra’s reported revenue was down 0.9 percent to $26.6 billion for 2015, while net profit after tax was down 1 percent to $4.2 billion.

However when last financial year’s profit and income from Telstra’s since-sold Hong Kong based mobile phone business CSL, as well as other M&A in 2015 is removed from the equation, the result looked considerably stronger. Total income was up 6.6 percent to $26.3 billion while earnings before interest, tax, depreciation and amortisation was up 4.5 percent to $10.8 billion.