Growth of 4G devices boosts Telstra mobile revenue

CEO David Thodey also reports NBN income growth and progress in Asia

Telstra said iPhone 6 was its best iPhone launch ever.

Telstra said iPhone 6 was its best iPhone launch ever.

The number of 4G devices on Telstra’s mobile network has overtaken 3G for the first time, Telstra CEO David Thodey said as he reported results for the half-year ending 31 December.

In addition to strong mobile revenue growth in the half, Telstra reported increasing income from the National Broadband Network and progress on its Asia plans following the $904 million purchase of Pacnet, which owns the world's largest submarine cable network.

Telstra now has 6.7 million 4G devices on its network, representing about 40 per cent of the base, which also includes 3G and 2G devices, said Thodey.

Of the 4G devices, there are 4.9 million are handsets, 666,000 tablets, 384,000 dongles and 624,000 Wi-Fi hotspots, he said.

The iPhone 6 launch was Telstra’s most successful iPhone launch ever, he added.

Telstra reported an increase in mobile data revenue in the half. Postpaid handheld revenue increased 8.3 per cent to $2.7 billion, driven by an increase in average revenue per user (ARPU), with higher value customers using more data.

Postpaid ARPU, excluding the impact of mobile repayment options (MRO), increased 4.4 per cent to $69.71 as the higher value customers used more data.

ARPU also grew on the prepaid side by 13.8 per cent due to increased data usage, driving an 18.9 per cent increase in prepaid handheld revenue, Telstra said.

Telstra began to roll out faster LTE-A services in the half, which the telco has marketed as “4GX.” The service is available to about 1000 towns and suburbs around Australia and users must have a compatible device to access the faster service.

Thodey said Telstra has sold about 4 million regular 4G services and 1 million 4GX services. “We’ve still got a long way to go in terms of that migration.”

Thodey said he still sees much room to grow mobile revenue, including opportunities presented by the Internet of Things.

“The use of tablets, the connectivity to machines, the opportunity to replace every PC or at least augment every PC with a mobile device, cars will be connected … Now they all have different ARPUs but in terms of the opportunity, I just get excited.”

Thodey reported progress on Telstra’a national Wi-Fi network. He said 1000 Wi-Fi hotspots were active at the end of 2014. Telstra has set a goal of providing access to 2 million Wi-Fi hotspots around the nation and 13 million around the world.


Telstra reported $385 million in NBN-related payments in the half, up from $294 million in the same period last year.

Telstra saw an increase in NBN infrastructure and PSAA payments, driven by the completion of the transit build and increased progress of the NBN rollout, said CFO Andy Penn.

Telstra and NBN Co completed renegotiation of their contract in December. Thodey said Telstra met all of its objectives.

“Firstly, Telstra shareholders have been kept whole, meaning the value Telstra expects to receive under any renegotiated arrangements will not be materially different than under the original agreements, a principle I’m pleased to say the government supported,” he said.

“Secondly, we met our objectives of preserving shareholder protections and negotiating new ones where they were required.

“Thirdly, we have retained regulatory certainty through the progressive structural separation of Telstra through the rollout of the NBN.”

Thodey added that he was pleased to sign a contract with NBN Co in December to provide planning and design services.

Progress in Asia

Penn said Telstra has seen strong growth in Asia, though from what he admitted was a low base.

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Thodey said the acquisition of Pacnet was critical to Telstra’s Asia plans.

“The enterprise services market is evolving rapidly and Pacnet will strengthen our networks, data centres, and undersea cable network; as well as boost our service offerings and people capabilities.”

Penn said Telstra is “well advanced into integration planning” following the acquisition of Pacnet, and expects to complete the transaction in the June quarter of this year.

Overall, revenue from Telstra’s Network Applications and Services (NAS) product line increased 18.1 per cent to $1 billion, with growth continuing in the Global Enterprise and Services segment and Telstra Retail, Telstra said. International NAS revenues increased by 28.1 per cent to $41 million.

Adam Bender covers telco and enterprise tech issues for Computerworld and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. Follow him on Twitter: @WatchAdam

Follow Computerworld Australia on Twitter: @ComputerworldAU, or take part in the Computerworld conversation on LinkedIn: Computerworld Australia

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