Telstra’s full-year profit has fallen 8.4 per cent to $3.6 billion as the impact of the NBN rollout and competition for mobile customers erode the company’s bottom line.
Despite those pressures, Telstra managed to keep sales revenues flat at $26 billion.
The results were slightly ahead of market expectations.
Telstra chief executive Andy Penn said the impact of things like the NBN were a worldwide phenomenon and were having an enormous impact on business.
“Wholesale prices have risen, meaning we and other industry participants are facing a fixed-line market where reseller margins are rapidly reducing,” he said.
“At the same time, competition in the mobile market is increasing with the expected entrance of a fourth mobile network operator.”
As flagged earlier, Telstra cut its full-year dividend to 22 cents, from 31 cents last year.
Mr Penn said the challenging environment of the past 12 months showed little sign of easing.
“These competitive pressures are playing out in our financial performance and we expect the challenging trading conditions experienced in 2018 to continue in 2019,” he said.
Telstra has accelerated its cost-cutting program to $2.5 billion by 2022, with $1.5 billion worth of costs to be stripped from the business in the next two years.
Central to that program was the previously announced shedding of 8000 jobs in the next three years, including removing two levels of management.
That will incur restructuring costs, mainly related to redundancies, of $600 million this year.
Telstra also intends to sell about $2 billion worth of property and assets in its campaign of shrinking to growth.
It has announced plans to split the company in two, creating a separate company based on its $11 billion infrastructure assets.
“The organisation we are becoming will look vastly different to the one we are today,” he said.
“Our workforce will be a smaller, knowledge-based one with a structure and way of working that is agile enough to deal with rapid change.”