Investors have reacted positively to Telstra’s impressive dividend and profit increase, as the telecommunications giant revealed plans to invest $800 million in enhancing its 5G mobile network. In its half-year results that surpassed analyst predictions, Telstra reported a 7.1% rise in net profit to $1.12 billion for the six months ending December 31, while earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 6% to $4.25 billion. The company raised its dividend by 5.6%, declaring an interim dividend of 9.5 cents per share, fully franked, to be paid on March 28. Following the announcement, Telstra’s shares surged by 5.5%, reaching $4.13 at 12:30 PM AEDT.
Telstra’s CEO, Vicki Brady, noted that demand for the company’s mobile network has tripled over the past five years, prompting a necessary “step change” in connectivity delivery. The investment will enable the introduction of new AI capabilities, including ‘self-healing’ technology that automatically detects and resolves faults, as well as AI-driven capacity management. Brady stated, “Over the next four years, we will increase our mobile investment by $800 million to extend our leadership and provide customers with the most advanced, resilient, and reliable 5G mobile network in the country.” This investment will be funded through a larger allocation of overall capital expenditure to the mobile network.
Telstra’s mobile network currently covers more than double the area of Optus and approximately three times that of Vodafone and TPG. The company continued to grow its mobile subscriber base, adding 119,000 net new mobile handheld customers, despite raising prices for both prepaid and postpaid services in 2024. Mobile services revenue increased by 3.1%, driven by a rise in average revenue per customer.
Last May, Telstra announced plans to reduce its workforce by 9%, affecting up to 2,800 jobs, due to rising inflation, energy costs, and challenging market conditions. Executives confirmed that these job cuts have been completed, contributing to a reduction in operating expenses for the half-year, although they did not rule out further reductions.
The results were released alongside data from the telecommunications ombudsman indicating a significant rise in customer complaints over the past quarter, largely attributed to the 3G network shutdown, which has impacted the reliability of mobile services for many users. Brady acknowledged the issues faced by some customers since the closure and assured that the company is working to identify the causes and provide assistance.
