Telstra Enterprise reports steady half-year revenue as mobility offsets decline in fixed line networks

Telstra’s enterprise and government unit Telstra Enterprise has reported steady revenue growth with wins in mobility offsetting declines in fixed networks.

For the six months ended 31 December 2021, Telstra Enterprise reported income (revenue and other income) of $3.5 billion, up 0.8 percent year over year from $3.46 billion. The growth was credited to a 10.5 percent growth in enterprise mobility, which had offset a 2.1 percent decline across fixed network products.

The fixed network decline included a 12.3 percent drop in data and connectivity income as NBN Co ramped up the rollout of its business fibre zones, and a 6.6 percent decline in calling applications revenue, citing declines in legacy ISDN and fixed line calling products.

Telstra chief executive Andrew Penn said the unit’s return to income and EBITDA growth makes it on track to deliver growth for the full year, in line with Telstra’s previously announced plans. “Telstra Enterprise also recently signed a major contract with the Department of Defence,” he added.

Overall, the telco saw year over year declines in revenue and profit, citing NBN-related costs and income from asset sales the company made in the previous year.

Telstra reported income of $10.9 billion for the period, down 9.4 percent from $12 billion in the half year ended 31 December 2020. Profit was $743 million for the half, down 34 percent to $1.1 billion.

The costs that contributed to the decline included $450 million in one-off NBN receipts and some $200 million in NBN commercial works. Last year also included one-off gains from the sale of Telstra’s Velocity and South Brisbane exchange assets and the sale and leaseback of its Pitt St. exchange.

The telco however called the result a win due to continued growth in its underlying business, with underlying EBITDA growing 5.1 percent year over year to $3.5 billion and underlying earnings per share increasing 55 percent to 6.2 cents.

Penn said the results reflected the positive momentum delivered through Telstra’s T22 strategy and put the company in a strong position as it transitions into T25.

“This was the second consecutive half of underlying growth,” Penn said. “The results show we have stayed disciplined and focussed on delivering what we said we would. The benefits of T22 are flowing through for our customers and our shareholders.

“As the nation has developed an ever-increasing reliance on digital connectivity, we are well placed to deliver the infrastructure, solutions and security needed to support Australia’s aspiration to become a world leading digital economy.”

The period also saw the T22 strategy reach above 80 percent of metrics achieved, or on track to be delivered, including its 5G network, its more simplified phone plan offerings and drop in customer complaints.

Looking into the company’s T25 strategy, Penn said its recent announcements of the new fibre infrastructure builds, acquisition of Papua New Guinea-based Digicel Pacific, a major contract win for Telstra Health and Telstra Energy on track to launch, are signs of early progress to the program.