Telstra’s top spot will not be threatened: Ovum

Telco’s cash sources, performance, and investment will have rivals struggling

Nermin Bajric (ARN)
15 August, 2012 15:57
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Australian telecommunications providers will have to pursue strategies as ‘alternative’ providers to Telstra in order to alleviate some of the struggle in keeping up with the giant, according to Ovum.

This recommendation comes on the back of Telstra’s 2012 financial year performance, in which it recorded total revenue growth of 8.5 per cent year on year.

Revenue aside, another driver of Telstra’s business is its $1.2 billion LTE network investment in the 2013 financial year.

Additionally, the telco’s ability to take much of its costs out of its business - $1.1 billion in the 2012 financial year – while improving customer outcomes and having TIO complaints decline by 26 per cent has had rivals struggling further.

All in all, Telstra has three sources of cash which keep it ahead. This includes its traditional high-margin businesses, its improved productivity performance, and its payments under the Telstra/NBN agreement.

As such, Ovum does not see any challenge to Telstra’s infrastructure leadership, particularly in mobile, in the foreseeable future.

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