Telecommunications giant Telstra has lifted its interim dividend to 15.5 cents, despite posting anaemic profit growth of just 0.8 per cent.

Telstra’s net profit after tax for the half-year to December was $2.09 billion.

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Despite modest profit growth of just 0.8 per cent, the telco is lifting its fully-franked interim dividend by 3.3 per cent to 15.5 cents per share, a total payout of $1.9 billion to shareholders.

Telstra is on track to hit its annual financial guidance despite the telecommunications giant posting a flat first half net profit amid intense competition.

Telstra said it expects to deliver mid-single digit income growth and low-single digit underlying earnings growth for the year ending June 30.

Free cashflow is expected to be between $4.6 billion and $5.1 billion and capital expenditure to be around 15 per cent of sales to fund increased mobile network investment.

Capital expenditure as a percentage of sales was 15.2 per cent in the first-half of fiscal 2016.

The profit came in at the same  level as last year when it was  aided by a drop in finance costs.

This half’s total income excluding finance income jumped 9.1 per cent to $14.2 billion in the first half.

Mobile revenue rose 3.7 per cent to $5.5 billion, but declined 1.5 per cent to $3.6 billion for the telco’s fixed line business
Chief executive Andrew Penn said the results were achieved against increased mobile competition and acceleration in the NBN roll out.

“We have continued to innovate and develop products and services to meet changing customer preferences and expectations in our fixed and mobile businesses,” Mr Penn said.

We are actively working to simplify our business, drive down costs and help our customers experience what technology can do for their lives and businesses,” he added.

Revenue rose 7.6 per cent to $13.68 billion from $12.72 billion a year ago.

– ABC, AAP