Telstra profits reach $1.6 billion

On track to expand 4G coverage to 66 per cent by June.

Telstra has reported increased net profit of 8.8 per cent to $1.6 billion for the half year ending December 31.

Telstra CEO, David Thodey, said the telco invested $1.9 billion in capital expenditure during the six months, which includes its national mobile network.

It has sold about 1.5 million 4G devices and he said it was on track to expand 4G coverage to 66 per cent by June. Mobile revenue grew 4.6 per cent to $4.5 billion.

“We continue to see customer growth in key products and services, particularly mobiles,” Thodey said.

The telco added 607,000 new domestic mobile customers in the six months to December, bringing the number to 14.4 million.

Total income increased 1.7 per cent to $12.7 billion and its offering a 14 cent fully franked interim dividend representing a $1.7 billion return to shareholders.

EBITDA increased 5 per cent to $4.98 billion and the telco had free cash flow of $2.1 billion, which included cash proceeds from the $671 million sale of TelstraClear.

NBN agreements contributed $176 million in revenue, including $94 million amortisation of Commonwealth payments received in fiscal 2012. It also included $82 million relating to the TUSMA agreement under which Telstra provides public interest services, including the Universal Service Obligation, and provision of access to infrastructure and other related services to NBN Co.

It also experienced a 10 per cent reduction in the number of TIO complaints from a year ago but Thodey acknowledged there was room for improvement in customer service.

“We are very committed to putting the customer at the centre of everything we do. We are continuing to make improvements, whether enhancing our digital and online service capability, refreshing mobile plans or cutting transaction times in our retail stores,” he said.

The number of fixed retail broadband customers increased from 85,000 to 2.7 million and about 117,000 customers on bundled plans were added taking it up to 1.5 million. However, PSTN customer numbers took a tumble by 151,000 to 7.9 million and revenue dipped 10.8 per cent.

Digital media revenue, which includes Sensis, declined 7 per cent. Revenue from Sensis was down 12.5 per cent, but digital revenue growth was 11 per cent an improvement from 2.5 per cent a year ago. Thodey said it would continue to restructure Sensis, taking it from a print to a digital business. "We will continue to focus on improving customer satisfaction, growing customer numbers, simplifying the business and taking advantage of new growth opportunities. We are making good progress but there is more to do,” Thodey said.

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