Telstra: Data, Voice, Mobile Revenues Under Pressure"

MELBOURNE -(Dow Jones)- Telstra Corp. (TLS), Australia's largest telecommunications company, said Thursday that data and voice revenues are under increasing pressure and capped plans will hit mobile revenues.

Chief Financial Officer John Stanhope told analysts during a conference call on the company's full year results, that increasing competition in the local market is squeezing margins in its key revenue-generating units.

Earlier Thursday, Telstra reported annual net profit of A$4.45 billion for the fiscal year ended June 30, 2005, up 8% from A$4.12 billion in the previous year.

Telstra's latest result is a "tale of two halves" with margin squeeze accelerating in the second half, Stanhope said. This, he said, has continued into the current 2005-06 fiscal year.

As a result, Stanhope warned that Telstra will likely report a decrease in profit in 2005/06.

On the same call, chief executive Solomon Trujillo confirmed the increasing pressure on margins and revenues. He is conducting a review of operations and the company's management and has appointed Greg Winn as chief operations officer, who has been briefed to "streamline" Telstra.

"The market is tough and very competitive," Trujillo said.

The future of Telstra relies on the review of operations, which Trujillo plans to release late October.

The 3.4% revenue decline in the company's PSTN, or fixed line, service in fiscal 2005 is expected to at least double this year, Stanhope said.

But he added that Telstra expects to report positive underlying revenue growth in fiscal 2006.

-By Lyndal McFarland, Dow Jones Newswires;
61-2-8235-2957; lyndal.mcfarland@dowjones.com
-Edited by Ian Pemberton

(END) Dow Jones Newswires"

Posted to the site on 11th August 2005