Finance Finance News NBN rollout hits Telstra earnings

NBN rollout hits Telstra earnings

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Telstra has forecast earnings to be at the lower end of its full year guidance range. Photo: AAP
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Telstra expects earnings to be at the bottom end of its full year guidance range and has flagged challenging conditions to continue in the year ahead.

The telco giant forecast earnings (EBITDA) to be at the lower end of its $10.1 billion to $10.6 billion range, on the back of increasing pressure on both fixed and mobile margins and challenges from the rollout of the national broadband network (NBN).

Telstra said despite investments in new technologies to keep up with industry changes, it expects the ongoing pressures will continue in the 2019 full year.

Chief executive Andy Penn said while he is optimistic about the long term of the industry and for Telstra, he is concerned about the short term.

“The national broadband network in particular has driven a number of challenging dynamics for the industry that collectively point to a difficult trading period ahead,” Mr Penn said.

“This is having a very material impact on the economics of the whole industry and has triggered a step change in the competitive environment.”

Mr Penn said Telstra has responded to the pressures by implementing a number of measures, including providing unlimited data to almost half of its fixed broadband base, improving the in-home experience for customers and boosting its Telstra TV offerings.

He said the company has continued to see strong demand for services and increased growth in data volumes and will continue to focus on reducing costs.

Telstra also confirmed it will offer a total dividend of 22 cents, fully franked, in accordance with its policy announced in August last year.

-AAP

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