Telstra feels enterprise revenue pinch amid 'reset'

Telstra’s revenue from fixed enterprise offerings dropped 4.9% in the half year ending December 2025 (1H 26) to $1.61 billion, with the $80 million drop in revenue being the largest in total volume out of any of its product areas.

The company attributed this decline to the 'ongoing reset' the company is undertaking in the Telstra Enterprise business unit.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) for the fixed enterprise segment was also down, dropping 9.4% to $87 million.

Fixed consumer and small business, fixed wholesale, international and InfraCo fixed also all saw revenue declines. 

However, a $40 million reduction in eliminations and a $202 million (3.6%) increase in mobile revenue served to offset those declines, resulting in a relatively flat overall revenue for the company at $11.85 billion, 0.2% up from the prior corresponding period.

Telstra also reported a 20.2% jump in EBITDA for fixed consumer and small business.

Overall, EBITDA for the company increased 4.7% to $4.4 billion and profit increased 8.1% to $1.2 billion.

Telstra said that overall, the first half of the 2026 financial year was a “strong period”.

“We delivered ongoing growth in earnings, reflecting momentum across our business, strong cost control and disciplined capital management,” the company said.

Telstra Enterprise reset

Much of the company’s labour savings came from the reset of the Telstra Enterprise business unit.

The company reduced total labour expenses by $118 million to $1.91 billion, which was slightly offset by $63 million in redundancy costs. 

The redundancies were first announced in July last year and over the 2025 calendar year, it reduced the total number of direct roles by 2,356, with 1,033 in the first half of the 2026 financial year.

The company plans to continue with further cuts as it commences with costs savings and the rest of Telstra Enterprise.

Telstra is also currently engaging with global consulting firm Accenture on a process of business transformation, with artificial intelligence a main priority.

The company said the project had made “good progress since launch”.

Enterprise revenue details 

Network application and services (NAS) revenue from enterprise customers declined 3.8% to $1.29 million, with calling applications revenue dropping 10.6% to $177m.

NAS-related equipment sales were down by $10.9%, NAS maintenance revenue down by 0.7%, NAS professional services down revenue by 2% and NAS cloud applications down revenue by 2.6%. 

These declines were attributed to a refocus on higher margin products core and connectivity, a decline in managed calling, and product exits.

Lowering costs led to NAS EBITDA increasing 14.8% up to $62 million.

$235 million of NAS-related revenue was from businesses that Telstra is planning to divest, such as Alliance Automation, Versent, and MTData.

Despite a refocus on core connectivity, revenue from data and connectivity from enterprise customers was down 8.9% to $317 million, as product refresh and upselling failed to outpace product refresh progress and higher bandwidth upselling.

EBITDA from enterprise fixed data and connectivity declined 40%, from $42m to $25m.

The number of fixed services to enterprise customers reduced by 8,000, or 8.9%, to 131,000.