Telstra flags continued challenging trading conditions

Telstra flags continued challenging trading conditions

CEO Andrew Penn cites increased competition amid NBN rollout

Telstra CEO Andrew Penn

Telstra CEO Andrew Penn

Australia's biggest telecom company Telstra Corp reaffirmed its full-year 2018 guidance on Monday and said "challenging trading conditions" were expected to continue into 2019.

Ongoing pressure on mobile and fixed ARPUs (average revenue per user) and the accelerating impact of the National Broadband Network would continue into FY19, the company said.

EBITDA (earnings before interest, tax, depreciation and amortisation) was expected to be at the bottom end of the range and free cashflow would be at the top end to moderately above, it said in a statement.

Capital expenditure for the full-year 2018 would be at the middle to upper end of the company's guidance. There would be incremental restructuring costs of $300 million, at the top of the guidance.

The National Broadband Network (NBN) was essentially a re-nationalisation of the fixed-access last mile of infrastructure from Telstra, CEO Andrew Penn said.

This had made Telstra a reseller of broadband services with the other operators.

"In the last 12 months alone we have moved from three big players in mobile and fixed to a situation today where we face a fourth network operator entrant in mobile, an increasing number of mobile virtual-network operators and more than 170 resellers of fixed," Penn said in a statement.

The NBN is usurping Telstra's status as the country's monopoly telecoms wholesaler, and will replace Telstra's copper lines with fibre-optic by about 2021.

(Reporting by Nicole Pinto in Bengaluru; Editing by Stephen Coates)

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